PUTIN'S REVEALING SPEECH TO HIS FEDERAL ASSEMBLY

On December 4, President Putin delivered his annual address to his federal general assembly.  He covered a myriad of topics, including Ukraine, American sanctions and Russian plans for the future in regards to business, trade and finances.  Here are some excerpts from the Kremlin’s official website.  The speech in it’s entirety can be found at

http://eng.kremlin.ru/news/23341

“Of course, we will talk about this year’s landmark events. You know that a referendum was held in Crimea in March, at which its residents clearly expressed their desire to join Russia. After that, the Crimean parliament – it should be stressed that it was a legitimate parliament that was elected back in 2010 – adopted a resolution on sovereignty. And then we saw the historical reunification of Crimea and Sevastopol with Russia.

It was an event of special significance for the country and the people, because Crimea is where our people live, and the peninsula is of strategic importance for Russia as the spiritual source of the development of a multifaceted but solid Russian nation and a centralised Russian state. It was in Crimea, in the ancient city of Chersonesus or Korsun, as ancient Russian chroniclers called it, that Grand Prince Vladimir was baptised before bringing Christianity to Rus.

In addition to ethnic similarity, a common language, common elements of their material culture, a common territory, even though its borders were not marked then, and a nascent common economy and government, Christianity was a powerful spiritual unifying force that helped involve various tribes and tribal unions of the vast Eastern Slavic world in the creation of a Russian nation and Russian state. It was thanks to this spiritual unity that our forefathers for the first time and forevermore saw themselves as a united nation. All of this allows us to say that Crimea, the ancient Korsun or Chersonesus, and Sevastopol have invaluable civilisational and even sacral importance for Russia, like the Temple Mount in Jerusalem for the followers of Islam and Judaism.”

“We cannot fail to mention today our perspective on the developments in Ukraine and how we intend to work with our partners around the world.

It is well known that Russia not only supported Ukraine and other brotherly republics of the former Soviet Union in their aspirations to sovereignty, but also facilitated this process greatly in the 1990s. Since then, our position has remained unchanged.

Every nation has an inalienable sovereign right to determine its own development path, choose allies and political regimes, create an economy and ensure its security. Russia has always respected these rights and always will. This fully applies to Ukraine and the Ukrainian people.

It is true that we condemned the government coup and the forceful takeover of power in Kiev in February of this year. The developments we are currently witnessing in Ukraine and the tragedy unfolding in the country’s southeast prove that we were right to take such a stand.

How did it all begin? I will have to remind you what happened back then. It is hard to believe that it all started with a technical decision by President Yanukovych to postpone the signing of the Association Agreement between Ukraine and the European Union. Make no mistake, he did not refuse to sign the document, but only postponed it in order to make some adjustments.

As you recall, this move was fully in line with the constitutional authority vested upon an absolutely legitimate and internationally recognised head of state.

Against this background, there was no way we could support this armed coup, the violence and the killings. Just take the bloody events in Odessa, where people were burned alive. How can the subsequent attempts to suppress people in Ukraine’s southeast, who oppose this mayhem, be supported? I reiterate that there was no way we could endorse these developments. What’s more, they were followed by hypocritical statements on the protection of international law and human rights. This is just cynical. I strongly believe that the time will come when the Ukrainian people will deliver a just assessment of these developments.

How did the dialogue on this issue begin between Russia and its American and European partners? I mentioned our American friends for a reason, since they are always influencing Russia’s relations with its neighbours, either openly or behind the scenes. Sometimes it is even unclear whom to talk to: to the governments of certain countries or directly with their American patrons and sponsors.

As I mentioned, in the case of the Ukraine-EU Association Agreement, there was no dialogue at all. We were told that it was none of our business or, to put it simply, we were told where to go.

All the arguments that Russia and Ukraine are members of the CIS free-trade zone, that we have deep-rooted cooperation in industry and agriculture, and basically share the same infrastructure – no one wanted to hear these arguments, let alone take them into account.

Our response was to say: fine, if you do not want to have a dialogue with us, we will have to protect our legitimate interests unilaterally and will not pay for what we view as erroneous policy.

So what’s came out of it all? The agreement between Ukraine and the European Union has been signed and ratified, but the implementation of the provisions regarding trade and economy has been postponed until the end of next year. Doesn’t this mean that we were the ones who were actually right?”

“There is also a question of why all this was done in Ukraine? What was the purpose of the government coup? Why shoot and keep shooting and killing people? In fact, the economy, finance and the social sector were destroyed and the country ruined.

What Ukraine currently needs is economic assistance in carrying out reforms, not petty politics and pompous empty promises. However, our Western colleagues don’t seem eager to provide such assistance, while the Kiev authorities are not willing to address the challenges their people are facing.

By the way, Russia has already made a major contribution to helping Ukraine. Let me reiterate that Russian banks already invested some $25 billion in Ukraine. Last year, Russia’s Finance Ministry extended a loan worth another $3 billion. Gazprom provided another $5.5 billion to Ukraine and even offered a discount that no one promised, requiring the country to pay $4.5 billion. Add it all up and you get as much as $ 32.5-33.5 billion that were provided only recently.

Of course, we have the right to ask questions. What was this Ukrainian tragedy for? Wasn’t it possible to settle all the issues, even disputed issues, through dialogue, within a legal framework and legitimately?

But now we are being told that this was actually competent, balanced politics that we should comply with unquestionably and blindfolded.

This will never happen.”

“However, talking to Russia from a position of force is an exercise in futility, even when it was faced with domestic hardships, as in the 1990s and early 2000s.

We remember well how and who, almost openly, supported separatism back then and even outright terrorism in Russia, referred to murderers, whose hands were stained with blood, none other than rebels and organised high-level receptions for them. These “rebels” showed up in Chechnya again. I’m sure the local guys, the local law enforcement authorities, will take proper care of them. They are now working to eliminate another terrorist raid. Let’s support them.

Let me reiterate, we remember high-level receptions for terrorists dubbed as fighters for freedom and democracy. Back then, we realised that the more ground we give and the more excuses we make, the more our opponents become brazen and the more cynical and aggressive their demeanour becomes.

Despite our unprecedented openness back then and our willingness to cooperate in all, even the most sensitive issues, despite the fact that we considered – and all of you are aware of this and remember it – our former adversaries as close friends and even allies, the support for separatism in Russia from across the pond, including information, political and financial support and support provided by the special services – was absolutely obvious and left no doubt that they would gladly let Russia follow the Yugoslav scenario of disintegration and dismemberment. With all the tragic fallout for the people of Russia.

It didn’t work. We didn’t allow that to happen. 

Just as it did not work for Hitler with his people-hating ideas, who set out to destroy Russia and push us back beyond the Urals. Everyone should remember how it ended.”

“No one will ever attain military superiority over Russia. We have a modern and combat ready army. As they now put it, a polite, but formidable army. We have the strength, will and courage to protect our freedom.

We will protect the diversity of the world. We will tell the truth to people abroad, so that everyone can see the real and not distorted and false image of Russia. We will actively promote business and humanitarian relations, as well as scientific, education and cultural relations. We will do this even if some governments attempt to create a new iron curtain around Russia.

We will never enter the path of self-isolation, xenophobia, suspicion and the search for enemies.

All this is evidence of weakness, while we are strong and confident.

Our goal is to have as many equal partners as possible, both in the West and in the East. We will expand our presence in those regions where integration is on the rise, where politics is not mixed with economy, and where obstacles to trade, to exchange of technology and investment and to the free movement of people are lifted.

Under no conditions will we curtail our relations with Europe or America. At the same time, we will restore and expand our traditional ties with South America. We will continue our cooperation with Africa and the Middle East.

We see how quickly Asia Pacific has been developing over the past few decades. As a Pacific power, Russia will use this huge potential comprehensively.

Everyone knows the leaders and the drivers of global economic development. Many of them are our sincere friends and strategic partners.”

“The most important thing now is to give the people an opportunity for self-fulfilment. Freedom for development in the economic and social spheres, for public initiatives is the best possible response both to any external restrictions and to our domestic problems. The more actively people become involved in organising their own lives, the more independent they are, both economically and politically, and the greater Russia’s potential.

In this context, I will cite one quote: “He who loves Russia should wish freedom for it; above all, freedom for Russia as such, for its international independence and self-sufficiency; freedom for Russia as a unity of Russian and all other ethnic cultures; and finally, freedom for the Russian people, freedom for all of us: freedom of faith, of the search for truth, creativity, work, and property.” Ivan Ilyin. This makes a lot of sense and offers a good guideline for all of us today.

Ladies and gentlemen,

Conscientious work, private property, the freedom of enterprise – these are the same kind of fundamental conservative values as patriotism, and respect for the history, traditions, and culture of one’s country.

We all want the same thing: wellbeing for Russia. So the relations between business and the state should be built on the philosophy of a common cause, partnership, and equal dialogue.”

“It is essential to lift restrictions on business as much as possible, free it from intrusive supervision and control. I said intrusive supervision and control. I will consider this in more detail later. I propose the following measures in this regard.

Every inspection should become public. Next year, a special register will be launched, with information on what agency has initiated an inspection, for what purpose, and what results it has produced. This will make it possible to stop unwarranted and, worse still, ‘paid to order’ visits from oversight agencies. This problem is extremely relevant not only for business, but also for the public sector, municipal institutions and social NGOs.

Finally, it’s crucial to abandon the basic principle of total, endless control. The situation should be monitored where there are real risks or signs of transgression. You see, even when we have already done something with regard to restrictions, and these restrictions seem to be working well, there are so many inspection agencies that if every one of them comes at least once, then that’s it, the company would just fold. In 2015, the Government should make all the necessary decisions to switch to this system, a system of restrictions with regard to reviews and inspections.

Concerning small business, I propose establishing ‘holidays from inspections’. If a company has acquired a good reputation and if there have not been any serious charges against it for three years, then for the next three years it should be exempted from routine inspections by government or municipal supervisory agencies. Of course, this does not apply to emergencies, when there is a danger to people’s health and life.

Business people talk about the need for stable legislation and predictable rules, including taxes. I completely agree with this. I propose to freeze the existing tax parameters as they are for the next four years, not revisit the matter again, not change them.

Meanwhile, it is important to implement the decisions that have already been made to ease the tax burden. First of all, for those who are just setting up their operations. As we have agreed, two-year tax holidays will be provided to small businesses registering for the first time. Production facilities that are starting from scratch will be entitled to the same exemptions.”

“Another thing. I propose a full amnesty for capital returning to Russia. I stress, full amnesty.

Of course, it is essential to explain to the people who will make these decisions what full amnesty means. It means that if a person legalises his holdings and property in Russia, he will receive firm legal guarantees that he will not be summoned to various agencies, including law enforcement agencies, that they will not “put the squeeze” on him, that he will not be asked about the sources of his capital and methods of its acquisition, that he will not be prosecuted or face administrative liability, and that he will not be questioned by the tax service or law enforcement agencies. Let’s do this now, but only once. Everyone who wants to come to Russia should be given this opportunity.

We all understand that the sources of assets are different, that they were earned or acquired in various ways. However, I am confident that we should finally close, turn the “offshore page” in the history of our economy and our country. It is very important and necessary to do this.

I expect that after the well-known events in Cyprus and with the on-going sanctions campaign, our business has finally realised that its interests abroad are not reckoned with and that it can even be fleeced like a sheep.”

“Diversion or embezzlement of budget funds allocated for federal defence contracts should be treated as a direct threat to national security and dealt with seriously and severely, as in the suppression of the financing of terrorism. I mention this for a reason.

I don’t think there is anything to hide or gloss over here. We have just held our regularl meeting in Sochi with the leadership of the Defence Ministry, combat arms and services commanders and leading defence company designers.

On certain positions, prices double, triple or quadruple, and in one case they grew 11 times. You realise that this has nothing to do with inflation or with anything, considering that practically 100 percent of funding is provided in advance.

I would like to reiterate, and I’m bringing this to the attention of law enforcement agencies. I instruct the Defence Ministry, the Federal Service for Financial Monitoring and other relevant agencies to develop a system of strict, effective oversight over the use of funding allocated for federal defence contracts. This system should operate along the entire supply chain. Tougher penalties should be imposed on those in charge of federal defence contract implementation for misspending every ruble from the budget.”

“Every child and teenager in our country should be able to find something to do outside the classroom. Any curtailment of extracurricular, supplemental education is unacceptable. Art, technology and music centres help create well-rounded people.

I’d like to ask the Government and the regions to focus on this issue and come up with financial and organisational approaches to address it. Most importantly, children and their parents should have a choice between getting additional education at school, a municipal centre of creativity, or a non-governmental educational organisation. Importantly, all these options must be affordable and children must have access to classes taught by properly trained professionals.

Another important issue that I spoke about in last year’s address is overcrowded schools and classrooms. We have crunched the numbers and found that we need to create an additional 4.5 million spots at schools.”

“We will never enter the path of self-isolation, xenophobia, suspicion and the search for enemies.

All this is evidence of weakness, while we are strong and confident.”