First
Person
PHOTOGRAPHS
APPENDIX
*
RUSSIA AT THE TURN OF THE
MILLENNIUM
Vladimir Putin
Humankind is witnessing
two major events: the new millennium and the 2000th anniversary of
Christianity. I think that the general interest and attention paid to these two
events is more profound than the usual celebration of red-letter dates.
New Possibilities, New
Problems
It may be a coincidence
but then again, it may be not that the beginning of the new millennium
coincides with the dramatic turn in world developments in the past twenty to
thirty years. I mean the deep and rapid changes in humankind's whole way of
life related to the formation of what we call the post-industrial society. Here
are its main features:
Changes in the economic
structure of society, with the diminishing importance of material production
and the growing importance of secondary and third sectors.
Consistent renewal and
quick introduction of novel technologies and the growing output of science-
intensive production.
Landslide developments in
information science and telecommunications.
Priority attention to
management and the improvement of systems of organization and guidance in all
spheres of human endeavor.
And lastly, human
leadership. It is the individual and his or her high standards of education,
professional training, business, and social activity that are the guiding force
of progress today.
A new type of society
develops slowly enough for careful politicians, statesmen, scientists, and all
those who use their brains to notice two issues of concern.
*This article by Vladimir
Putin while he was prime minister and acting president of Russia, first
appeared on December 31, 1999, on the web site of the Government of the Russian
Federation (http://www.gov.ru/ministry/isp-vlast47.html).
The first is that changes bring not only new
possibilities to improve life, but also new problems and dangers. These
problems and dangers became obvious in the ecological sphere first. But other
acute problems could soon be detected in all other areas of social life. Even
the most economically advanced states are not free from organized crime,
growing cruelty and violence, alcoholism and drug addiction, and experienced a
weakening of the family and its education role, and the like.
The second alarming
element is that many countries do not benefit from the booming modern economy
and general prosperity. The quick progress of science, technology, and advanced
economy is underway in only a small number of nations, populated by the
so-called "golden billion."
Quite a few countries
achieved new economic and social development standards in the twentieth
century. But they did not join in the process of creating a post-industrial
society. Most of them are still far from it. And there are grounds to believe
that this gap between pre- and post-industrial societies will persist for quite
some time yet.
This is probably why, at
the turn of the new millennium, humankind is peering into the future not only
with hope, but also with fear.
The Modern Situation in Russia
It would be no
exaggeration to say that Russia feels this mixture of hope and fear
particularly strongly. There are few nations in the world, which have faced as
many trials as Russia in the 20th century.
First, Russia does not
rank among the countries with the highest levels of economic and social
development. And second, our Fatherland is facing difficult economic and social
problems.
Russia's GDP nearly halved
in the 1990s, and its GNP is ten times smaller than the U.S. and five times
smaller than China. After the 1998 crisis, the per capita GDP dropped to
roughly U.S. $3,500, which is roughly five times smaller than the average for
the G7 states.
The structure of the
Russian economy has changed. Now the fuel industry, power engineering, and
ferrous and non-ferrous metallurgy occupy the key positions in the national
economy. They account for some 15% of Russia's GDP, 50% of our overall
industrial output, and over 70% of exports.
Labor productivity and
real wages in the economy are extremely low. While our production of raw
materials and electricity is about equal to the world average, our productivity
in other industries is 20-24% of the U.S. average.
The technical and
technological standards of manufactured commodities largely depend on the share
of equipment that is less than five years old. In Russia, that share dwindled
from 29% in 1990 to 4.5% in 1998. Over seventy percent of our machinery and
equipment is over ten years old, which is more than double the figure in the
economically developed countries.
This is the result of
consistently dwindling national investments, above all to the real economy
sector. And foreign investors are not in a hurry to contribute to the
development of Russian industries. The overall volume of direct foreign
investments in Russia amounts to barely 11.5 billion dollars. China received as
much as 43 billion dollars in foreign investments.
Russia has been reducing
allocations on research and development, while the 300 largest transnational
companies provided 216 billion dollars on R&D in 1997, and some 240 billion
dollars in 1998. Only 5% of Russian enterprises are engaged in innovative
production, and the output is on an extremely low scale.
The lack of capital
investments and the wrong attitude toward innovation resulted in a dramatic
fall in the production of commodities that are world competitive in terms of
price-quality ratio. Foreign rivals have pushed Russia especially far back in
the market of science-intensive civilian commodities. Russia accounts for less
than 1% of such commodities on the world market, while the U.S. provides 36%
and Japan 30% of them.
The real incomes of the
Russian population have been falling since the beginning of the reforms. The
greatest plummet was registered after the August 1998 crisis, and it will be
impossible to restore the pre-crisis living standards this year. The over-all
monetary incomes of the population, calculated by the UN methods, add up to
less than 10% of the U.S. figure. Health and the average life span the indices
that determine the quality of life deteriorated, too.
The current dramatic
economic and social situation in our country is the price we have to pay for
the economy we inherited from the Soviet Union. But then, what else could we
inherit? We had to install market elements into a bulky and distorted system
based on completely different standards. And this was bound to affect the
progress of the reforms.
We had to pay for the
Soviet economy's excessive focus on the development of the raw materials and
defense industries, which negatively affected the development of consumer
production and services. We are paying for the Soviet neglect of such key
sectors as information, science, electronics, and communications. We are paying
for the absence of competition between producers and industries, which hindered
scientific and technological progress and prevented the Russian economy from
being competitive in the world markets. This is the cost of the brakes and the
bans put on Russian initiatives and enterprises and their personnel. Today we
are reaping the bitter fruit, both material and mental, of the past decades.
On the other hand, we are
responsible for certain problems in this current renewal process. They are the
result of our own mistakes, miscalculation and lack of experience. And yet, we
could not have avoided the main problems facing Russian society. The path to
the market economy and democracy was difficult for all nations that searched
for it in the 1990s. They all shared roughly the same problems, although in
varying degrees.
Russia is completing the
first, transition stage of economic and political reforms. Despite problems and
mistakes, it has embarked upon the highway that the whole of humanity is
travelling. As global experience convincingly shows, only this path offers the
possibility of dynamic economic growth and higher living standards. There is no
alternative to it.
The question for Russia
now is what to do next. How can we make the new, market mechanisms work to full
capacity? How can we overcome the still deep ideological and political split in
society? What strategic goals can consolidate Russian society? What place can
Russia occupy in the international community in the 21st century? What
economic, social, and cultural frontiers do we want to attain in 10-15 years?
What are our strong and weak points? And what material and spiritual resources
do we now have?
These are the questions
put forward by life itself. Until we find clear answers that all people can
understand, we will be unable to quickly move forward to the goals, which are
worthy of our great country.
The Lessons to Learn
Our very future depends
on the lessons we learn from our past and present. This is a long-term job for
society as a whole, but some of these lessons are already clear.
1. For most of the twentieth century, Russia
lived under the communist doctrine. It would be a mistake not to recognize the
unquestionable achievements of those times. But it would be an even bigger
mistake not to realize the outrageous price our country and its people had to
pay for that social experiment.
2. What is more, it would be a mistake not to
understand its historic futility. Communism and the power of the Soviets did
not make Russia a prosperous country with a dynamically developing society and
free people. Communism vividly demonstrated its inability to foster sound
self-development, dooming our country to lagging steadily behind economically advanced
countries. It was a blind alley, far away from the mainstream of civilization.
3. Russia has reached its limit for political
and socio-economic upheavals, cataclysms, and radical reforms. Only fanatics or
political forces which are absolutely apathetic and indifferent to Russia and
its people can make calls for a new revolution. Be it under communist,
national-patriotic, or radical-liberal slogans, our country and our people will
not withstand a new radical break-up. The nation's patience and its ability to
survive as well as its capacity to work constructively have reached the limit.
Society will simply collapse economically, politically, psychologically, and
morally.
4. Responsible socio-political forces ought to
offer the nation a strategy of revival and prosperity based on all the positive
elements of the period of market and democratic reforms and implemented only by
gradual, prudent methods. This strategy should be carried out in a situation of
political stability and should not lead to deterioration in the lives of any
section or groups of the Russian people. This indisputable condition stems from
the present situation of our country.
2. The experience of the 90s demonstrates
vividly that merely experimenting with abstract models and schemes taken from
foreign textbooks cannot assure that our country will achieve genuine renewal
without any excessive costs. The mechanical copying of other nations' experience
will not guarantee success, either.
Every country, Russia
included, has to search for its own path to renewal. We have not been very
successful in this respect thus far. We have only started groping for our road and
our model of transformation in the past year or two. Our future depends on combining
the universal principles of the market economy and democracy with Russian
realities. Our scientists, analysts, experts, public servants, and political
and public organizations should work with this goal in mind.
A Chance for a Worthy
Future
Such are the main lessons
of the twentieth century. They make it possible to outline the contours of a
long-term strategy which will enable us, within a relatively short time, to
overcome the present protracted crisis and create conditions for our country's fast
and stable economic and social improvement. The paramount word is
"fast." We have no time for a slow start.
I want to quote the
calculations made by experts: It will take us approximately fifteen years and
an eight percent annual growth of our GDP to reach the per capita GDP level of present-day
Portugal or Spain, which are not among the world's industrialized leaders. If
during the same fifteen years we manage to annually increase our GDP by ten
percent, we will then catch up with Britain or France. Even if we suppose that
these tallies are not quite accurate, our current economic lag is not that
serious and we can overcome it faster, but it will still require many years of work.
That is why we should formulate our long-term strategy and start pursuing it as
soon as possible.
We have already made the
first step in this direction. The Strategic Research Center, which was created
with the most active participation of the government, began its work in the end
of December. This Center will bring together the best minds of our country to
draft recommendations and proposals to the government for both theoretical and
applied projects. It will devise both the strategy itself and will find the
most effective means to tackle the tasks, which will come up in the course of
implementing the strategy.
I am convinced that
ensuring the necessary growth dynamics is not only an economic problem. It is
also a political and, in a certain sense I am not afraid to use this word ideological
problem. To be more precise, it is an ideological, spiritual, and moral problem.
It seems to me that the latter is of particular importance in our current
efforts to ensure the unity of Russian society.
The Russian Idea
The fruitful and creative
work, which our country needs so badly, is impossible in a split and internally
disintegrated society, a society where the main social sections and political
forces do not share basic values and fundamental ideological orientations.
Twice in the outgoing
century Russia has found itself in such a state: After October 1917 and in the
1990s.
In the first case, civil
accord and social unity were forged not so much by what was then called
"ideological educational" work as by brute force. Those who disagreed
with the ideology and policy of the regime were subjected to persecution and oppression.
As a matter of fact, this
is why I think that the term "state ideology" advocated by some
politicians, publicists, and scholars is not quite appropriate. It creates
certain associations with our recent Soviet past. A strict state ideology
allows practically no room for intellectual and spiritual freedom, ideological
pluralism, and freedom of the press. In other words, there is no political
freedom.
I am against the restoration
of an official Russian state ideology in any form. There should be no forced
civil accord in a democratic Russia. Social accord can only be voluntary.
That is why it is so
important to achieve social accord on such basic issues as the aims, values,
and orientations of development, which would be desirable for and attractive to
the overwhelming majority of Russians. The absence of civil accord and unity is
one of the reasons why our reforms are so slow and painful. Most of our energy
is spent on political squabbling, instead of handling the concrete steps toward
Russia's renewal.
Nonetheless, some
positive changes have appeared in this sphere in the past year or so. The
majority of Russians demonstrate more wisdom and responsibility than many politicians.
Russians want stability, confidence in the future, and the ability to plan for themselves
and for their children not for a month, but for years and even decades to come.
They want to work in peace, security, and a sound, law-based order. They want to
use the opportunities opened by various forms of ownership, free enterprise,
and market relations.
It is on this basis that
our people have begun to perceive and accept supranational universal values,
which are above social, group, or ethnic interests. Our people have
accepted such values as
freedom of expression, freedom to travel abroad, and other fundamental
political rights and human liberties. People value the fact that they can own
property, be engaged in free enterprise, build up their own wealth, and so on
and so forth.
Another foothold for the
unity of Russian society is our traditional values. These values are clearly
seen today:
Patriotism
This term is sometimes
used ironically and even derogatorily. But for the majority of Russians it
retains its original, positive meaning. Patriotism is a feeling of pride in one's
country, its history and accomplishments. It is the striving to make one's
country better, richer, stronger, and happier. When these sentiments are free
from the tints of nationalist conceit and imperial ambitions, there is nothing
reprehensible or bigoted about them. Patriotism is the source of our people's
courage, staunchness, and strength. If we lose patriotism and the national
pride and dignity that are connected with it, we will no longer be a nation
capable of great achievements.
The Greatness of Russia
Russia was and will
remain a great power. It is preconditioned by the inseparable characteristics
of its geopolitical, economic, and cultural existence. They determined the
mentality of Russians and the policy of the government throughout our history
and they cannot help but do so now.
But the Russian mentality
should be expanded by new ideas. In today's world, a country's power is
manifested more in its ability to develop and use advanced technologies,
ensuring a high level of general wellbeing, protecting its security, and upholding
its national interests in the international arena, than in its military
strength.
Statism
Russia will not become a
second edition of, say, the U.S. or Britain, where liberal values have deep
historic traditions. Our state and its institutions and structures have always
played an exceptionally important role in the life of the country and its
people.For Russians, a strong state is not an anomaly to be gotten rid of.
Quite the contrary, it is a source of order and main driving force of any
change. Modern Russia does not identify a strong and effective state with a
totalitarian state. We have come to value the benefits of democracy, a law-based
state, and personal and political freedom. At the same time, Russians are
alarmed by the obvious weakening of state power. The public looks forward to a
certain restoration of the guiding and regulating role of the state, proceeding
from Russia's traditions as well as the current state of the country.
Social
Solidarity
It is a fact that the
striving for corporate forms of activity has always prevailed over individualism.
Paternalistic sentiments have deep roots in Russian society. The majority of
Russians are used to depending more on the state for improvements in their own
condition than with their own efforts, initiatives, and flair for business. And
it will take a long time for this habit to die.
Let's not dwell on
whether this is good or bad. The important thing is that such sentiments exist.
In fact, they still prevail. That is why they cannot be ignored. They must be
taken into consideration in the social policy, first and foremost.
I suppose that the new
Russian idea will come about as an organic unification of universal general
humanitarian values with the traditional Russian values that have stood the
test of time, including the turbulent twentieth century. This vitally important
process must not be accelerated, discontinued, and destroyed. It is important
to prevent the first shoots of civil accord from being crushed underfoot in the
heat of political campaigns and elections.
The results of the recent
elections to the State Duma inspire great optimism in this respect. They
reflect a turn towards a growing stability and civil accord. The overwhelming
majority of Russians said no to radicalism, extremism, and revolutionary opposition.
It is probably the first time since the reforms began that such favorable
conditions for constructive cooperation between the executive and legislative
branches of power have been created.
Serious politicians,
whose parties and movements are represented in the new State Duma, are advised
to draw conclusions from this fact. I am sure that their sense of responsibility
for the nation will prevail and that Russia's parties, organizations, and movements
and their leaders will not sacrifice Russia's interests, which call for a solidary
effort of all sane forces, to narrow partisanship and opportunism.
Strong State
We are at a stage where
even the most correct economic and social policies can start misfiring because
of the weakness of the state and the managerial bodies. A key to Russia's
recovery and growth is in the state-policy sphere. Russia needs a strong state
power. I am not calling for totalitarianism. History prove all dictatorships,
all authoritarian forms of government are transient. Only democratic systems
are lasting. Whatever our shortcomings, humankind has not devised anything superior.
A strong state power in Russia is a democratic, law-based, workable federal state.
I see the following steps
in its formation:
streamlining state
agencies and improving governance; increasing professionalism, discipline, and responsibility
amongst civil servants; intensifying struggle against corruption; reforming
state personnel policy through selection of the best staffs; creating conditions
that will help develop a full-blooded civil society to balance out and monitor
the authorities; increasing the role and authority of the judicial branch of
government; improving federative relations (including budgetary and financial);
launching an active and aggressive campaign against crime
Amending the constitution
does not seem to be an urgent, priority task. We have a good constitution. Its
provisions for individual rights and freedoms are regarded as the best
constitutional instrument of its kind in the world. Rather than drafting a new code
of law for the country, a serious task indeed is to enforcing the existing constitution
and the laws passed under it, to apply the constitution for the state, society,
and each individual.
Russia currently has more
than a thousand federal laws and several thousand laws of the republics,
territories, regions and autonomous areas. Not all of them correspond to the
above criterion. If the justice ministry, the prosecutor's office and the
judiciary continue to be as slow in dealing with this matter as they are today,
the mass of questionable or simply unconstitutional laws may become critical.
The constitutional security of the state, the federal center's capabilities,
the country's manageability and Russia's integrity would then be in jeopardy.
Another serious problem
is inherent in government authority. Global experience leads us to conclude
that the main threat to human rights and freedoms to democracy as such, emanates
from the executive authority. Of course, a legislature that makes bad laws also
does its bit. But the main threat emanates from the executive. It organizes the
country's life, applies laws and can objectively distort these laws rather substantially
although not always deliberately by making executive orders.
The global trend is that
of a stronger executive authority. Not surprisingly, society endeavors to
better control itself in order to preclude arbitrariness and misuses of office.
This is why I, personally, am paying priority attention to building partner relations
between the executive authority and civil society, to developing the institutes
and structures of the latter, and to waging a tough war against corruption.
Efficient Economy
I have already said that
the reform years have generated a heap of problems in the national economy and
social sphere. The situation is complex, indeed. But it is too early to bury
Russia as a great power. Troubles notwithstanding, we have preserved our
intellectual strength and human resources. A number of R&D advances and technologies
have not been wasted. We still have our natural resources. So the country has a
worthy future in store.
At the same time, we must
learn the lessons of the 1990s and ponder the experience of market reform.
1. Throughout these years we have been groping
in the dark without having a clear sense of national objectives and advances
which would ensure Russia's standing as a developed, prosperous and great
country of the world. Our lack of long-range development strategies for the
next fifteen to twenty years hurts our economy.
2. The government firmly intends to act on the
principle of unified strategy and tactics. Without it, we are doomed to just
patching up holes and responding to emergencies like the fire department.
Serious politics and big business are done differently. The country needs a
long-term national strategy of development. I have already said that the
government has already launched a program to design it.
2.1 Another important
lesson of the 1990s is that Russia needs to form a system for the state to
regulate the economy and social sphere. I do not mean to return to a system of
planning and managing the economy by fiat, where the all-pervasive state was
regulating all aspects of any factory's work from top to bottom. I mean to make
the Russian state an efficient coordinator of the country's economic and social
forces, balancing out their interests, optimizing the aims and parameters of
social development, and creating conditions and mechanisms for their attainment.
Of course this notion goes beyond the bounds of the standard formula, which technologies
have not been wasted. We still have our natural resources. So the country limits
the role of the state in the economy to establishing the rules of the game and then
monitoring their enforcement. In time, we are likely to evolve to this formula.
But today's situation necessitates deeper state involvement in the social and
economic processes. While establishing the dimensions and planning mechanisms
for the system of state regulation, we must be guided by the following principle:
The state must act where and when it is needed; freedom must exist where and
when it is required.
3. The
third lesson is the transition to a reform strategy that is best suited to our conditions.
It should proceed in the following directions:
3.1. To encourage dynamic
economic growth.
Primarily, to encourage
investments. We have not yet resolved this problem. Investment in the real
economy sector fell by five times in the 1990s, including by 3.5 times into
fixed assets. The material foundations of the Russian economy are being undermined.
We call for pursuing an
investment policy that would combine pure market mechanisms with measures of
state guidance.
At the same time, we will
continue working to create an investment climate attractive to foreign investors.
Frankly speaking, without foreign capital, our country's road back to recovery
will be long and hard. We don't have time for slow growth. Consequently, we
must do our best to attract foreign capital to the country.
3.2. To pursue an
energetic industrial policy.
The future of the country
and the quality of the Russian economy in the 21st century will depend above
all on progress in the high technologies and science-intensive commodities.
Ninety percent of economic growth today depends on new achievements and
technologies.
The government is
prepared to pursue an economic policy of priority development of the leading
industries in research and technology. The requisite measures include:
assisting the development
of extra-budgetary internal demand for advanced technologies and science-intensive
production, and supporting export-oriented high-tech production
supporting non-raw
materials industries working mostly to satisfy internal demand
buttressing the export
possibilities of the fuel and energy and raw-materials complexes.
We should use specific
mechanisms to mobilize the funds necessary for pursuing this policy. The most
important of them are the target-oriented loan and tax instruments and the provision
of privileges against state guarantees.
3.3. To carry out a
rational structural policy.
The government thinks
that as in other industrialized countries, there is a place in the Russian
economy for the financial-industrial groups, corporations, small and medium businesses.
Any attempts to slow down the development of some, and artificially encourage
the development of other economic forms would only hinder the rise of the national
economy. The government will create a structure that would ensure an optimal
balance of all economic forms of management.
Another major issue is
the rational regulation of natural monopolies. This is a key question, as
monopolies largely determine the structure of production and consumer prices.
They therefore influence both economic and financial processes, as well as people's
incomes.
3.4. To create an
effective financial system.
This is a challenging
task, which includes the following directions: improving the effectiveness of
the budget as a major instrument of the economic policy of the state carrying
out tax reform getting rid of non-payments, barter, and other pseudo-monetary
forms of settlement maintaining a low inflation rate and stable ruble creating civilized
financial and stock markets and turning them into a means to accumulate investment
resources restructuring the bank system.
3.5. To combat the shadow
economy and organized crime in the economic and financial-credit sphere.
All countries have shadow
economies. But in industrialized countries their share of the GDP does not
exceed fifteen to twenty percent, while in Russia, they control forty percent
of the GDP. To resolve this painful problem, we should not just raise the effectiveness
of the law-enforcement agencies, but also strengthen license, tax, hard currency,
and export controls.
3.6. To consistently
integrate the Russian economy into world economic structures.
Otherwise we will not
rise to the high level of economic and social progress attained in the
industrialized countries.
The main directions of
this work are:
resolutely combat
discrimination against Russia in the global commodity, service, and investment
markets, and to approve and apply a national anti-dumping legislation to
incorporate Russia into the international system of regulating foreign economic
operation, above all the WTO
1. To pursue a modern farm policy.
2. The revival of Russia will be impossible
without the revival of the countryside and agriculture. We need a farm policy
that will organically combine measures of state assistance and state regulation
with the market reforms in the countryside and in land ownership relations.
2. We must insist that virtually all changes and
measures entailing a fall in the living conditions of the people are
inadmissible in Russia.
We have come to a line
beyond which we must not go.
Poverty has reached a
mind-boggling scale in Russia. In early 1998, the average world per capita
income amounted to some 5,000 dollars a year, but it was only 2,200 dollars in
Russia. And it dropped still lower after the August 1998 crisis. The share of
wages in the GDP dropped from 50% to 30% since the beginning of reforms. This
is our most acute social problem. The government is elaborating a new income policy
designed to ensure stable growth in the real disposable incomes of the people.
Despite these
difficulties, the government is resolved to take new measures to support science,
education, culture and health care. A country where the people are not physically
and psychologically healthy, are poorly educated and illiterate, will never rise
to the summits of world civilization.
Russia is in the midst of
one of the most difficult periods in its history. For the first time in the
past 200-300 years, it is facing a real danger of sliding to the second, and possibly
even third, echelon of world states. We are running out of time to avoid this. We
must strain all intellectual, physical and moral forces of the nation. We need coordinated,
creative work. Nobody will do it for us.
Everything depends on us and us alone on our ability
to see the size of the threat, to consolidate forces, and to set our minds to
prolonged and difficult work.
PHOTOGRAPHS
My mother Mariya Ivanovna
Shelomova
My father Vladimir Spiridonovich
Putin
Grandad was a cook for Lenin and Stalin.
Masha, on the right,
wants to become a manager, and Katya an interior designer.
Judo is not just a sport. It's a philosophy.
Clinton is very charming.
(September 1999 in Aukland, New Zealand)
Boris Nicholayevich
Yeltsin's birthday, February 1, 2000.
A few seconds later Boris
Nicholayevich turned to me and said, ''Take care of Russia."
After he was wounded, my father worked on a collective
farm.
My father in the navy in 1932.
With my mother in July,
1958
With my parents before I left for Germany in 1985
Grandma Olya lived her
whole life in the country.
Sasha Grigoriev (right)
runs the FSB in the St. Petersburg-Leningrad region.
Three photos of me in the
KGB.
My favorite portrait of Lyudmila.
I proposed to Lyudmila
and three months later we married. I married late in life, in1983, when I was already
thirty.
My first daughter, Masha,
was born in 1985
These are my lovely
ladies.
At the dacha with our poodle Toska.
O00O
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