Putin promises to bolster economy, military power

December 12, 2012

MOSCOW (AP) — Russia's President Vladimir Putin vowed Wednesday to strengthen the country's economy and its military might and rejected what he described as foreign lecturing about democracy and attempts at foreign interference in the nation's internal affairs.

Putin's speech was his first state-of-the nation address since winning a third term in March's election despite a wave of massive protests in Moscow. Putin has taken a tough course on dissent since his inauguration with arrests and searches of opposition activists and introduction of laws that impose heavy fines on protesters and rigid rules on civil society groups.   

In a speech that focused heavily on social issues, Putin encouraged families to have more children, promised to create 25 million new jobs and develop new incentives for teachers, doctors, engineers and others.

He also pledged to support "institutions that represent traditional spiritual values," a hint at even more state support for the Russian Orthodox Church. In August, three members of the punk band Pussy Riot were sentenced to two years in prison for performing a protest song in Moscow's main cathedral against the church's backing for Putin. One of them was released on appeal, but two others are serving their sentences despite an international outrage over what was widely seen as the intolerance to dissent in Russia.

Putin said Russia would follow its own view on democracy and shrug off any "standards enforced on us from outside." "Direct or indirect foreign interference in our political processes is inadmissible," he said. "Those who receive money from abroad for their political activities and serve alien interests shouldn't engage in politics in Russia."

One of the laws passed by the Kremlin-controlled parliament requires non-governmental organizations that receive foreign funding and engage in vaguely defined political activities to register as "foreign agents," a move the groups said was aimed to intimidate them and destroy their credibility before the Russians where the term "agent" is synonymous to spy.

Putin said that on the global stage Russia's task will be to preserve its "national and spiritual identity," adding that the strengthening of the nation's military might should "guarantee its independence and security."

He said Russia would continue to push for "coordinated collective efforts" in dealing with global issues. The Kremlin has said that its continuous refusal to support international sanctions against Syria's President Bashar Assad is rooted in international law that bars interference into a sovereign country's affairs.

The conflict in Syria has started nearly 21 months ago as an uprising against Assad, whose family has ruled the country for four decades and it quickly morphed into a civil war, with rebels taking up arms to fight back against a bloody crackdown by the government. According to activists, more than 40,000 people have been killed since March 2011.

Putin sought to boost patriotic feelings by promising to honor heroes of World War I and restoring the historic names of old imperial regiments of the Russian army. He also made new promises to boost the fight against corruption.

Russia is considered to be one of the most corrupt countries in the world. A group that tracks global perception of the problem ranks Russia 143rd out of 183 countries. "A sustained and visible effort to reduce corruption is one of the catalysts that could cut the current high risk premium investors apply to Russian equities," Chris Weafer, chief strategist at Sberbank CIB investment bank said in a note to investors earlier this week

Putin called for sanctioning officials who own foreign stocks or banks accounts abroad, and said they will have to explain the source of financing for big purchases including real estate abroad. His statements would play well with the domestic audience, which has relished in the recent ouster of Defense Minister Anatoly Serdyukov over a military corruption scandal and investigations against other officials suspected of graft. Still, Gleb Pavlovsky, a political analyst and former Kremlin political strategist told the Intefax news agency that "Putin had failed to send a message of purging the high ranks."

The opposition ridiculed Putin's statements as lacking substance and novelty. "Everything will be fine soon, I promise," opposition activist Alexei Navalny wrote sarcastically while summing up Putin's address.

Putin repeated pledges to reduce the nation's reliance on exports of oil and other mineral resources and encourage the development of high-tech industries. He also lamented a huge capital outflow and Russian companies moving abroad to avoid the uncertainties of Russian laws and courts.

Russian authorities are expecting capital outflows of up to $65 billion this year. Putin quoted analyst estimates that 9 out of 10 major deals of Russian companies are registered abroad to be governed by foreign laws. He urged the government to seek more information on Russian companies from offshore nations where they are registered.

Nataliya Vasilyeva contributed to this report.