OREANDA-NEWS. February 14, 2008. It is my pleasure to welcome you to this event that has now become a tradition. I would like to begin as usual by summing up the results for 2007.

I will have to give a few figures. I will be brief, but I will repeat some of the figures I have already quoted, and I am happy to do so because 2007 was a successful year. It is enough to say that, as you already know now, our economy grew by 8.1 percent, and this is one of our best results over these last years. Calculated on a purchasing parity basis, our economy has grown to a size that now puts us ahead of G8 countries such as Italy and France. Russia’s economy is now the seventh biggest in the world (according to data from international experts).

Real incomes have increased by 10.4 percent and wages are up by 16.2 percent. Real pensions have increased by 3.8 percent. This is higher than inflation but pension increases are still lagging behind wage growth. We have therefore decided to increase the insurance part of pensions by 12 percent as from February 1 of this year, and this part of the pension will undergo a further increase of 7.5 percent on April 1, while the basic part of the pension will be increased by 15 percent as from August 1 of this year. I stress that we will keep very close watch at the same time on developments in the inflation situation. The Government will unquestionably keep its eye on the situation and adjust pensions in accordance with inflation. 

Our demographic project is going ahead successfully. I am particularly pleased to see the results in this area because a lot of people doubted that our proposed demographic measures would be effective in any way. Some people thought this was an impossible situation to deal with. But the birth rate dynamic in 2007 was at its best for the last 25 years and more children were born than in the last 15 years. What is especially important and especially pleasing to see is that we achieved one of the goals we set, namely to increase the number of families having a second or third child. The number of such families rose by 10 percent (from 33 percent to around 42 percent). As we promised, we are indexing all benefits in this area, including the maternity capital.

As you will recall, the maternity capital was initially set at 250,000 roubles. This year it will be 271,000 roubles and we are planning for a sum of around 307,000 roubles in 2010 depending on the inflation situation. I would like to assure our citizens that the state will continue to ensure strict fulfilment of all of its obligations in this area.

One of the biggest and most serious problems we face is that of poverty. In 2000, more than 30 percent of our population was living below the poverty line, but I am pleased to be able to say that this figure had come down to 17.7 percent in 2005, 15.3 percent in 2006, and was lower than 14 percent in 2007. The number of unemployed people has also dropped and I think we now have around 4.3 million unemployed.

Industrial production shows a good growth dynamic. Industrial output growth did not exceed 4 percent in 2005 and 2006, but last year it went up to 6.3 percent. The processing sectors have shown particularly good results and some sectors are growing very fast indeed, not just the service sector, but also areas such as construction, which was up by around 20 percent, and housing construction, which posted an even higher increase. Really, we are now seeing something of a construction boom underway in the country.

Investment in basic capital was higher last year than at any time in the last eight years and came to 21.1 percent. We did not see such a figure even back in 2000, when the economy grew by 10 percent. Net capital inflow to the Russian Federation totalled $82.3 billion last year – two times higher than the figure for 2006.

Our country is consolidating its financial situation. Our foreign currency reserves increased by $170 billion and we are now close to reserves of half a trillion dollars, $478.6 billion to be more precise, according to the latest data. There has been a slight decrease due to changes in the dollar’s exchange rate. The Stabilisation Fund now comes to 3.84 trillion roubles. Russian banks have ridden out the liquidity crisis without much trouble. The stock market index increased by 20 percent, which is slightly less than last year, but last year saw a record result. In general, the Russian stock market is growing at record rates – 20 percent is a decent figure. 

We are also well aware of the problems. Chief among them is inflation. We have not yet managed to bring inflation fully under control. Inflation grew by more than what we had planned for. Our forecast was for inflation of 8.5 percent, but instead we had 11.9 percent. Bringing down the inflation rate in this and the coming years is one of our biggest priorities, a priority for the entire Government and national leadership, especially for those in charge of the economy.

That is all that I wanted to say for a start. I will not tire you with long monologues and numbers. Please, begin with your questions.

PRESIDENTIAL PRESS SECRETARY ALEXEI GROMOV: Good afternoon colleagues, let’s begin now.

KOMSOMOLSKAYA PRAVDA NEWSPAPER: Your second presidential term is coming to an end now. What do you think was your biggest achievement and your greatest failure over these years? 

VLADIMIR PUTIN: I do not think there were any serious failures. To start with the second part of your question, we reached the goals we set and we accomplished what we set out to do. There are some things we probably could have done more effectively. I just mentioned the inflation problem, for example. Inflation could have been lower perhaps if we had concentrated our efforts more intensively on this task, mobilising not only the country’s economic officials but also public and political organisations. Why do I say this? Because inflation is an issue that concerns state spending, and the whole issue is about ensuring that all state spending is justified, for if we let spending get out of hand and do not keep it under control it inevitably has an impact on the inflation situation, as we all know. But we also need to look at the objective facts. The inflow of private capital that I mentioned before is partly speculative in nature (I am not using this term in any negative sense). These are people playing the markets and they have every right to do so. Moreover, the Russian economy has to a certain extent become something of a haven for international capital. We offer a stable economic and political situation and this attracts capital. But all of this has an impact on inflation, as does the large number of petrodollars. Overall, the Central Bank and the Government are managing to keep the situation under control, though there probably are additional steps we could have taken. 

In the fight against poverty, as I already mentioned, the dynamic is positive. Here too we could have done more, especially as far as pensioners are concerned. The way that pensions for people who worked during the Soviet period, that is, until 1991, were calculated was not the best method. We will have to come back to this problem and take real steps to improve the pension situation for our citizens.

As for the results we have achieved and the things I see as positive, I will not list everything now. I think that our results are well known and I have already spoken about them on past occasions. Our country was not united and we did not even have a real national anthem. Each of the different regions had its own constitution that differed from the Constitution of the Russian Federation. We restored Russia’s territorial integrity and unity. We rebuilt the state. Through our efforts people’s incomes have reached and even surpassed pre-reform levels. Mostly importantly of all, we have rebuilt the Russian economy, placing it on an absolutely new market-based foundation. We are making steady progress towards becoming one of the world’s economic leaders.  

Only a few countries have achieved such rapid growth in securities and assets over the last twenty years. These are above all Asian countries such as Taiwan, Malaysia and Singapore and also to some extent Thailand and China. Russia has now joined these ranks and this is a great achievement. 

As for my personal feeling, I am not ashamed to stand before the people who twice gave me their votes and elected me to be President of the Russian Federation. I have worked like a galley slave throughout these eight years, morning till night, and I have given all I could to this work. I am happy with the results.

NEZAVISIMAYA GAZETA NEWSPAPER:  When you were first elected president you likened yourself to a manager hired by the people to run the huge ‘Russia Inc. Corporation’. In your heart, do you think you are a good manager, have you always made only right decisions, and do you think the ‘client’ is happy with your work?

VLADIMIR PUTIN: I more or less just answered this question. I am happy with the results of my work. I think that the ‘client’, the Russian people, the voters who twice gave me their votes in presidential elections, is satisfied overall. This is backed up by public opinion surveys and by the current level of support expressed for the President of the Russian Federation.   

As I said, our biggest achievement is to have rebuilt Russia’s economy on a new and modern foundation, and this is reflected in people’s incomes. Incomes are growing by 10-12 percent a year, and, as I said, wages grew by more than 16 percent over the last year. People should see these results reflected in their own pockets, and I think that this is something we have achieved. Though, of course, all of these wonderful figures, these macroeconomic indicators such as economic growth and so on do not always translate into improvements in life at the individual level. Still, no one can accuse us of not addressing this problem and not trying to improve living standards. The implementation of the national projects is evidence that we are indeed working hard to ensure that our economic results benefit people at the individual level.

Finally, we are not clinging to the past but are looking to the future, and I think this is also very important. You no doubt heard my speech at the expanded meeting of the State Council, at which I spoke of the need for innovative development. The whole problem, after all, is that we have achieved much over these last eight years, but if we continue on the same road we will come to a dead end. There are certainly past achievements of which we should be proud, but we must also think about the future, set new goals, ambitious new goals, and map out the roads we will take to achieve these goals. In other words, we are looking to the future and I think this is very important.

MOSKOVSKY KOMSOMOLETS NEWSPAPER: There have been a lot of calls for you to seek a third term in office over these last two or three years. There were no doubt attempts to influence you on this issue including by your entourage. What did you say in private conversation to the people who proposed changing the Constitution, and how great was the temptation to give in to these appeals and stay for a third term?

VLADIMIR PUTIN: I prefer to keep what I said in private conversation private; that is what private conversations are for, after all. Given that we have a big audience today with practically all of the world media and the Russian regional media present, I will reply in more official language.

I never felt any temptation to seek a third term in office. Right from my first day as President of the Russian Federation I decided that I would not violate the Constitution. This was something instilled in me during my time working with Anatoly Alexandrovich Sobchak. I think this sends a very important signal to society in general, namely, that everyone, from the head of state down, must respect the laws in force. I think this is a matter of principle, not a technical issue.   

Of course I want to keep working, but such opportunities exist.

It is in people’s nature to form dependencies on various things. Some people become addicted to drugs and others to money. It is said that most addictive of all is power. I have never felt this. I never have been the kind of person to become dependent on anything. I think that if God has given me the good fortune to work for the good of my country, and I have always felt a real connection to my country, I should be grateful for this opportunity, which is in itself the greatest reward. I think it is completely unacceptable to seek further reward or to try to hold on to power, to imagine that once you are in the top seat you should have the right to stay there until the day you die. 

Russia should be a democratic state under the rule of law, and this means that all of its citizens, including its leaders, must respect the law.

VLADIVOSTOK NEWSPAPER (Primorsky Region): We know that a state programme for the resettlement of Russians from abroad has begun. One of its goals is to attract people to the depressed regions of Eastern Siberia and the Far East. But with the situation as it is at present no one is coming to the Far East: life is too expensive there and there are too many inconveniences and too few opportunities for realising one’s potential. What is the state going to do, if anything, to try to stop the exodus of people from the Far East? 

VLADIMIR PUTIN: This issue preoccupies not just you but many of our citizens. It is also of great concern for me. We are indeed seeing a decline in the population of Eastern Siberia and the Far East. The population continues to fall and the measures being taken have not yet brought the expected results. I have repeatedly come back to this issue over the last 5-6 years. There is a development programme for the Far East, a federal targeted programme. We plan to hold some major international events in the region, including the APEC summit, which will take place in Vladivostok. We plan to put considerable federal resources into developing this region, above all into infrastructure development. 

Of course people in the Far East should enjoy the same economic situation and perhaps even better conditions than people in the European part of Russia. Attempts have always been made to give people incentives to stay in the region, ensure comfortable living conditions and give them economic incentives to stay. This includes things such as prices for electricity, heating and transport. This might look like a not very market-based approach, but we will have to offer some kind of preferential treatment in these areas. I will stop at this for now, but I can say that we are looking at what we can do in this area and are reflecting on the measures we can take to ensure better living conditions for our citizens in the Far East.

FOX NEWS CHANNEL, USA: My question concerns your words about retargeting nuclear missiles against Ukraine if Ukraine joins NATO or becomes part of the missile defence system. Condoleezza Rice called it yesterday deplorable and unacceptable rhetoric. Would you take back these words or comment on them? Also, does the fact that a Russian bomber made a low flight over the aircraft carrier Nimitz signify movement towards confrontation between the military in our countries? 

VLADIMIR PUTIN: No, there is no confrontation on the horizon and I hope that there never will be. Incidentally, I can tell you that our American partners have held four military exercises, if I recall rightly, very close to the Russian border in the Alaska area. The United States’ strategic aviation has never stopped its patrols, including along Russia’s borders over the last 15 years, although we ended patrols by our strategic aviation in remote areas back around 1987. But our American partners never ended their patrols. At the expert level, our American colleagues reacted completely calmly to the renewal of patrols by our strategic aviation and no one saw any aggressive signal in this step, and rightly so. All this signals is that our Armed Forces have greater possibilities now and that we will continue to train our pilots, give them experience, and improve our military equipment, including our aviation. How can we do all of this without flights? We will continue this practice. That is the first point I want to make.   

Second, regarding the possibility of retargeting missiles, I will of course comment on this situation and I am grateful to you for raising this issue. We will not target our missiles against anyone unless there is the extreme need to do so.

Take a look at what kind of situation we are talking about.

I have no doubt that there are people among you today who would appeal to democracy, freedom and so on. Democracy is a universal concept and it cannot be local (that is, you cannot apply democratic principles in one place and forget about them entirely in another). If a country considers itself democratic it has to be democratic in every way, in every manifestation, both at home and on the international stage. 

What is democracy? We all know that democracy is government by the people. Our American partners are looking to deploy elements of a missile defence system in Eastern Europe, a radar station in the Czech Republic, and interceptor missiles in Poland, and these plans look like they will indeed go ahead. But who asked the Czechs and the Poles if they actually want these systems on their soil? According to the information I have received, the vast majority of Czech citizens are not enthusiastic about these plans. Our General Staff and our experts think that this system represents a threat to our national security. If this system is established, we will be forced to make an appropriate response. In such a situation we probably would be forced to retarget our missiles against the sites that represent a threat. But it is not we who are creating these sites. We are asking that this not go ahead, but no one is listening. We are giving a clear warning right from the start that if you take this step this is the response you can expect from us. No one asked the Czechs’ opinion. It was simply decided to carry out these plans and that is that. Moreover, even NATO was not asked. Only after criticism came from Moscow did attempts begin to start coordinating this issue within NATO itself.

As for the situation in Ukraine, according to the information I have, the overwhelming majority of Ukrainians oppose joining NATO. But the Ukrainian leadership has nonetheless signed a certain document on starting the accession procedure. Is this democracy? Were the country’s citizens asked their opinion? But if this is the way things are being done, without anyone’s opinion being asked, then perhaps bases could also be established there in the future and missile defence system components deployed there. And what are we to do? In such a situation we would be obliged to target our missiles at these sites that we consider a threat to our national security. I think I have a duty to say this frankly and honestly today, so that no one in the future can try to offload the responsibility for such developments in events onto our heads. We do not want such developments in events. We are simply speaking honestly and clearly about the problems we see, that is all.  

VESTI RESPUBLIKI NEWSPAPER (Republic of Chechnya): People in the Republic of Chechnya associate the positive changes that have taken place in our republic over this short time with your name, but many are worried that the constructive policies being carried out in Chechnya could change after your departure.

Also, our people would like you to come to Chechnya.  We were expecting you when you visited the Northern Caucasus. If you have time, please come and pay us a visit.  

VLADIMIR PUTIN: Thank you. First of all, I promise that I will come.

Second, concerning the positive changes, they are above all the work of the Chechen people themselves. You know how to work and you are working effectively. The republic’s leadership is concentrating its financial resources, both federal and local resources, on resolving the key problems affecting the social well-being of all people in the republic.

I am very happy with the changes we are seeing. No one can say of Grozny now that it looks like Stalingrad in 1943 or 1944. The changes really are visible to all. But there is still a lot of work to do. Above all, there is a need for new jobs. Unemployment is still very high in the Caucasus. The Chechen leadership and the republic’s president, Ramzan Kadyrov, have big plans. I will meet with them and we will be discussing all of these different projects. I assure you that development in the North Caucasus in general, in Chechnya and throughout all of Russia will continue unhindered. It is absolutely clear today that our people want to continue this positive course that we have been following over the last eight years. This is the guarantee of our future success.

TV-CENTRE TELEVISION CHANNEL: The presidential election is just around the corner. Why did you decide to support Dmitry Anatolyevich Medvedev in particular?

VLADIMIR PUTIN: As you know, Dmitry Anatolyevich Medvedev was nominated by United Russia, A Just Russia and a number of other public organisations and parties. I was indeed happy to give my backing to this nomination and support Dmitry Anatolyevich Medvedev as candidate for president of the Russian Federation.

As I have said before, I have known Dmitry Anatolyevich for a long time now and I am sure that the experience he has gained over his years of work in Moscow, as chief of staff of the Presidential Executive Office and first deputy prime minister, and his personal and professional qualities are the guarantee that he will be able to work successfully in this, the country’s highest office. He is an honest and decent man. He is young, progressive and modern, has an excellent theoretical background and good organisational skills gained through his work here in the capital. I am sure that he will be a good president, a worthy president and an effective manager. Aside from everything else, I trust him. Quite simply, he has my trust. As I said at United Russia’s congress, I can feel confident and unashamed about handing over the main reins of power in this country to such a person. 

XINHUA NEWS AGENCY MOSCOW BUREAU, CHINA: How do you see future relations with China?

VLADIMIR PUTIN: China is one of our main strategic partners and this is something confirmed by our work together over the days and the hours. Our trade with China is growing very fast. This is an important aspect of our cooperation but it is not the most important factor. More important is that the relationship of trust between Russia and China is an important stabilising factor in the world. We see how the Chinese people and the Chinese leadership nurture and look after relations with Russia, and this is something we value very much. We have far-reaching plans for trade and investment cooperation and for developing high-technology production and working together in the space sector, defence and military-technical cooperation. China is one of our biggest partners in the area of military-technical cooperation. We see how rapidly China is developing its own high-technology base in this area. China is one of the few countries with whom we have established trusting cooperation for the long term, perhaps even decades ahead.  

I have absolutely no doubt that we will maintain this level of trust between our two countries and take our cooperation to new heights, above all in the economy. One of the serious issues we need to work on together is that of environmental cooperation, including as regards the use of rivers in the border area. But we see that despite the difficulties, including technological difficulties, our Chinese partners are seeking solutions to these problems, respond swiftly to technological incidents and disasters, attempt to minimise the consequences and are ready to look for new forms of cooperation that would prevent such incidents in the future. No one is ever completely guaranteed against such events, of course, but working together on addressing environmental issues will be one of the most important areas for our two countries over the coming years. With the good will of both countries we can resolve these problems, and the good will is there in both China and Russia. 

SHEST SOTOK NEWSPAPER: Land relations are a very broad and fundamental issue. Maybe this is an issue that should be dealt with not by ten different agencies but by one agency working on a comprehensive and permanent basis?

VLADIMIR PUTIN: Yes, these functions are indeed somewhat dispersed between the different institutions, agencies and ministries. There are two possible solutions: either to create a position of a vice-prime minister and assign to him responsibility for this whole set of issues, or concentrate all of these different issues within a single agency. 

If the situation turns out as I hope and a president is elected whom I support, and if a government is formed accordingly and I have the opportunity of heading this government, we will take one of these two roads. I agree with you that we need to focus our administrative possibilities on resolving these issues and we will do this. 

RUSSIA TODAY TELEVISION CHANNEL: How do you think relations between Russia and the United States will develop once you and George Bush are no longer in office, and who do you think will win the U.S. presidential election?

VLADIMIR PUTIN: The winner will be whoever puts forwards the most effective programme that meets the American public’s demands and succeeds in clearly convincing the majority of voters that their programme is the best. Whoever wins, we will, as they say in such cases, respect the American people’s choice and work with whoever becomes president, if, of course, the new president wants to work with us.  

As for the future of relations between our two countries, I have no real doubts on this point. No matter what is said during election campaigns, the fundamental interests of Russia and the United States will inevitably prompt the leadership in both countries into developing a positive dialogue as partners at the very least. 

The United States is one of Russia’s biggest trade and economic partners. Only by cooperating with each other can we effectively fight terrorism, strengthen the weapons of mass destruction non-proliferation regime, combat poverty and infectious diseases. These are all global problems that we can only hope to resolve if all the world’s leading countries join forces. I have no doubt that this is clear in the minds of the leadership in both Russia and the United States. I am sure that these fundamental ideas will serve as the guideline for the presidents in both countries, no matter what their names (not that the personal aspect is without importance, but the fundamental significance of our relations is more important). 

POLISH TELEVISION: What will happen to relations between Russia and Poland if elements of the missile defence system are deployed in Poland? And a second question: many Poles are worried about Russia’s return to superpower status, given the historical experience. What can you do to assure Poles that a powerful Russia is not a threat to countries such as Poland? 

VLADIMIR PUTIN: I do not think that we should heap ashes on our heads and turn to self-flagellation in an attempt to prove to all how good we are. Russia is not behaving aggressively and is not fixated on the difficult moments in the history of our bilateral relations. Russia thinks that we need to look to the future and draw on the positive pages in our relations, and this way we can expect success.

Concerning relations with Poland in particular, I would like to point out that we have not taken a single step aimed at creating difficulties in the relations between our countries. We have made no such moves. Yes, we decided to build a gas pipeline across the Baltic Sea. I do not understand how this could offend Poland. This is our gas and we want to sell it to our main consumers in Europe. We already built a gas transport system across Polish territory. We carried out this work together and we pay the transit fees on time and supply Poland with all necessary energy resources without any restrictions whatsoever. There have not been any interruptions. Indeed, in previous years, based on the take-or-pay principle, our Polish partners ended up taking less gas that what they had contracted for, and in principle, Gazprom had the right to impose penalties, but we did not do this and looked for other solutions to the situation. In other words, there have been no restrictions and we will not impose any restrictions in the future. But our position is that we need to diversify our supply routes for delivering energy resources to our main consumers. What is bad about this? Is there anything anti-Polish here? Why such a reaction? Where does it come from? To be honest, I was really quite surprised.

As for problems such as the meat imports issue, this is not a Russian-Polish issue. I discussed this with Mr Tusk [Polish Prime Minister Donald Tusk] when he visited. This is more of an issue between Russia and Europe. The issue here is that agriculture in Eastern European countries receives large subsidies from European financial sources and produce is then dumped on the Russian market. This is stifling the development of our own agriculture sector. There are also some specific issues. For example, we are carrying out a national rural development programme and have been offering various incentives to the agriculture sector such as making loans available. Many agricultural producers have taken out these loans and now it is time to repay them, but to repay them they need to sell their produce and they cannot do so on the domestic market. We can either continue to toss accusations each other’s way or we can sit down at the negotiation table and sort out the issue, examine the motives behind our actions and take each other’s interests into account. In this sense, Poland could act as the conduit for our common interests in the European organisations. What we need to do is not trade accusations with Poland but join forces to protect our interests in the face of richer countries. We face a situation in which on the one hand we have the problem of subsidies and dumping of agricultural produce on our market, and on the other hand we see that the Polish authorities are not always managing to deal with the flows of smuggled goods coming in from Latin America and Asia, and we clearly have to respond somehow.

As I said, we need not to aggravate our relations but to look for solutions. I had a very constructive, businesslike and substantial dialogue with Mr Tusk and I hope that this will continue to be the case. As for the missile defence issue and so on, it seems to me that this issue is closely linked to economic concerns. I have the impression that someone is deliberately fanning an anti-Russian mood in order to create the moral and political climate for deploying these systems. If you stir up anti-Russian sentiment in Poland it will be easier to convince the public that they need some new weapons systems or other supposedly for their protection. In reality it is not clear where the threat is coming from. They say it is Iranian missiles that are the threat, but we all know that Iran has no such missiles.

I discussed this matter too with the Polish Prime Minister. If such systems are deployed on Polish territory or attempts are made to use them to neutralise our nuclear missile potential, this would upset the strategic balance in the world and would be a threat to our national security, and we would have no choice in such a situation but to take countermeasures, including possibly retargeting our offensive missile systems against the sites we consider to pose a threat.

We do not want to do this. Would this obstruct development of our relations in other areas? I do not think so in principle, but the level of security in Europe would be lower, of course. Frankly speaking, I do not understand why anyone needs this. No one is retargeting any missiles at the moment and we are all developing our relations. Yes, sometimes we have disputes, sometimes we argue, but then we cool down, get together again and begin tackling our common problems, and all without targeting any missiles against each other. Why change the situation for the worse?

I hope very much that we will have a constructive dialogue with our Polish colleagues and American partners on all of these issues and that we will be able to take each other’s concerns and interests into account.

NTV TELEVISION CHANNEL: In your outline of Russia’s strategy through to 2020, you promised that Russia will become the most attractive country to live in. At the same time, you said that the state administration is not ready for this task, that it is corrupt, excessively bureaucratic and lacks motivation. Who then will provide you and the future president with the needed support base for achieving these goals? Do you plan to head United Russia once your presidential term is over? 

VLADIMIR PUTIN: I have no plans at the moment to head a political party. As for my support base, you and the other citizens of our country will be my support base. Of course, this will not be easy with the administrative system in its current state. Coming back to the start of your question though, you said I made this promise. I did not promise anything. I said that this should be our goal, that this is the kind of Russia I would like to see, that this is what we should aspire to. I am certain that we can achieve this goal but we still have a lot of work to do first. We need to resolve at least two big problems. One of these problems is that of diversifying our economy and achieving innovative development. In this respect we need to increase labour productivity, perhaps by as much as a four-fold increase. Another very important problem is that of fundamentally improving the state management system at every level, from the municipalities and up to federal level. In other words, we need quality change in the economy and in public administration and governance. We need to work on both of these issues as we go along. Is this possible or not? Of course it is possible. The fact that in a number of sectors we are still at quite a low level of development even creates an opportunity in that we can jump straight away over several stages as other countries have done.  

If we provide tax incentives for upgrading production facilities, for example, this gives producers the chance to buy the very latest equipment, purchase the most advanced and efficient technology, and this will help to dramatically increase labour productivity. To achieve this we also need an educated and healthy labour force, of course, and this means that we must invest in healthcare and education. If we take a comprehensive approach to resolving these problems and do not just make declarations, we will most certainly achieve our goal.

I remember the joke back in the 1980s: We were promised communism by 1980 but we got the Moscow Olympics instead. The goals we are declaring today, however, are based not on wishful thinking but on real calculations and real analysis of the Russian economy and its development prospects in the medium and long term.

KOMMERSANT NEWSPAPER: You have unveiled your strategy for the period through to 2020. Dmitry Medvedev will announce his plan for the next four years in Krasnoyarsk tomorrow. Could these two plans not come into conflict with each other?

And a second question: at the start of 2000, you spoke of a ‘pleasant sense of responsibility’. Could you repeat these same words now, eight years later? Are you tired of power or do you enjoy it?

VLADIMIR PUTIN: You spoke now about a sense of responsibility, and indeed, responsibility can sometimes be a heavy burden because you have to make decisions that no one else can make, and they are far from always easy decisions. Of course I worry about all of this, like any normal person. These are decisions that affect the well being and situation of millions of people, decisions that sometimes affect the lives of specific individuals in the country. No one else can make these decisions. There are many bosses, but ultimately, it is the head of state who has the final word. This is a heavy moral burden and it is the situation faced not only by the president of the Russian Federation but by the leader of any country, big or small. Do you imagine that Bush has an easy time? You may laugh, but his country has huge responsibility in the world, perhaps even greater responsibility than Russia, given the greater possibilities his country has. And when he makes decisions on matters both domestic and international, no matter whom he consults, the decisions are nonetheless his decisions. We may not always agree with them, but this is a complex process, including at the emotional level. This sense of responsibility therefore has always been with me. Moreover, in my practical work I have always been guided above all by my sense of responsibility before my own people. I think that this method of making decisions on social issues and security matters has never let me down.

You asked if I think that our plans could come into conflict with each other. Whatever they say that we have shaped the political landscape in Russia to our desires, there are many people who do not agree with what we have done over these last eight years and who do not agree either with our development plans. But, taking a serious look at this criticism and at the situation, it seems to me that there is nothing constructive and no depth to these arguments. No one has proposed anything more real and substantial. Dmitry Anatolyevich [Medvedev] and I are well aware that the line of attack against us will be at once personal, political and economic. There will be attempts to find differences in our approaches. There are always differences, but over the more than 15 years that we have worked together we have become used to listening to each other. As President, I never felt it beneath me to listen to the views of specialists and I often adjust my own views under the influence of respected colleagues when I see that what they are saying is correct, constructive and justified. 

As for my relations with Dmitry Anatolyevich, what he will set out in his speech in Krasnoyarsk is essentially a continuation of the strategy that I outlined at the expanded meeting of the State Council. His address will complement, give concrete form to and build on these proposals for developing the country, not over the next decade, but over the next four years.