The presence in the front row of the audience of the Moscow Patriarch illustrates the continued stress on the importance of the Russian Orthodox Church.

Russian President Vladimir Putin gave his annual address today, December 4, to the Federal Assembly, the national parliament which consists of the State Duma (lower chamber) and the Federation Council (upper chamber.)

Translation: Woman in Chelyabinsk watches a TV broadcast of Vladimir Putin’s address to the Federal Assembly. Did you watch the president’s speech? Photo by Aleksandr Kondratyuk/RIA Novosti.

Translation: This was an address not to the Federal Assembly (the elite, which everyone understands), it was an address to the Russian television viewer. So everything is without changes.

Gudkov is one of the few remaining opposition leaders in the State Duma.

TASS had a summary of Putin’s remarks, which The Interpreter has summarized in translation, with quotations:

Crimea

This is an “inalienable part” of Russia and a historical moment. It was in Kherson that Prince Vladimir accepted Christianity who then Christianized all of Rus’, so it is the “spiritual source of the formation of a multifaceted but monolithic [ethnic] Russian nation and Russian [civic] state.”

Ukraine



The Ukrainian people are a “fraternal people.”

“Each people have an inalienable right to their own path of development, to the choosing of their allies, to the forms of political organization of their society and the construction of their economy and guaranteeing of their security. Russia will always regard with with respect.”

But it is “hypocritical” to talk about human rights which was a cover for the “coup” in Ukraine.

Sanctions





“If it weren’t for the situation in Ukraine, the West would think up some other excuse to contain Russia’s growing abilities.”

Counter-Terror Operation in Grozny

TASS has reported at least 10 policemen have been killed and 28 wounded in Grozny, and described the operation as “nearing completion” although battles continue throughout today.

“The attempt to speak to Russia from a position of strength is pointless, and didn’t work even with the difficulties of the 1990s and 2000s.” “These ‘rebels’ have once again shown themselves in Chechnya. I’m certain that the local guys, the local law-enforcement agencies will cope with this decently. They are the ones today working on the liquidation of the latest sally of the terrorists. We support them.”

Economic Liberalization

No changes to the tax system are planned for four years, and a complete amnesty for offshore capital is promised if the business returns to Russia.

“If a person legalizes his funds and property in Russia, he will receive firm legal guarantees that he will not be dragged through various agencies including law-enforcement, nor be ‘shaken up’ here and there; he will not be asked about the sources and means of obtaining his capitals; he will not encounter criminal or administrative persecution and there will be no questions on the part of the tax services and law-enforcement agencies.”

Putin also mentioned “tax holidays” for small business; if an enterprise has a reliable reputation and has no significant reprimands for 3 years, then there will be no inspections from the state and municipal level.

Balance of Forces

After the US withdrew from the ABM treaty, there has been a violation of the strategic balance and frequently “ill-conceived decisions”. Russia doesn’t intend to get dragged into a long arms race but Russia’s defense will be ensured under these new circumstances.

“Our army is modern and battle-ready. As they say now, it is polite, but threatening. We have the forces, the will and the courage to defend our freedom.”

Currency



Putin called on the Bank of Russia and government to discourage speculators from exploiting the current “fluctuations.” Putin acknowledged a “short-term burst of inflation”. Citizens with small incomes “must be protected.” The Cabinet of Ministers and the regional governments must control prices on food, medications and necessities.

The fall of the ruble increases the competitiveness of domestic companies. And this must be used to exchange domestic medicines and food for imported ones.

Economy



Putin said Russia could “break out of the trap of zero growth rates” and go to 5% growth and keep inflation at 4% — by only making purchases abroad of things for which there is nothing analogous in Russia. The government will make a special purchase coordinating center to get large projects to procure goods from Russian enterprises. More state orders should go to small and medium businesses.

Demographics

The UN projected Russia’s population to drop to 136 million at the end of 2013. But as of January 1, 2014, it was nearly 144 million, 8 million more than the forecast, and a natural growth of the population has been noted for 2 years. With the addition of Crimea and Sevastopol, the population will grow to 146 million. The life expectancy is now over 71.

Health

Putin wants to make 2015 the year to combat cardiac disease. The health system is moving to an insurance system. Doctors must be provided with a certificate to enable them to increase their qualifications or re-train.

Education

Russia should “stop chasing quantity and concentrate on quality” to prepare engineers. Programs to support gifted children are to be encouraged with grants.

Some comments:

o Putin’s remarks on Ukraine seem to be a typical example of the Kremlin’s “hybrid war” prevarication — there was nothing specific said about the ceasefire — or actual lack thereof — or relations in the future.

o Putin seems keen for now to downplay the threat of domestic terror and leave the handling of the sudden re-emergence of Chechen terrorists to Chechen strongman Ramzan Kadyrov and not specify any new federal involvement — this enables him to look the other way while mass human rights violations are made on the way to stopping remaining insurgents in the North Caucasus.

o The plan to exonerate all offshore business and guarantee freedom from persecution remains to be tested, but it’s also forgiveness for what in some cases is criminal, and related to Putin’s cronies. How is this different than the windfalls for oligarchs criticized under Yeltsin’s “loans for shares” program?

o Putin seems to be making lemonade out of lemons with the ruble crash — he never uses the word “drop” but only “fluctuations” — but it remains to be seen if domestic products will actually become more popular with enforced bans or discouragements on imports, or whether a black market will surge as was the case in Soviet times.

o It isn’t clear how Putin can combine both a crackdown on corruption involving more inspections, with encouragement of business. The “tax holiday” isn’t well-defined as it applies to those who “keep a good reputation” for 3 years. It is thus subject to arbitrary bureaucracy and cronyism. And nothing was said about tax hikes actually slated for 2015 on small businesses.

o Putin had nothing to say about striking medical workers losing their jobs, or slashes in health care. The campaign against cardiac disease is welcome, but Putin had nothing to say about combating alcoholism or drug abuse.

o One thing Russia has never been short of is engineers, so encouraging more of them may not help the economy. Putin didn’t mention Internet business and specifically computer professionals, but then he cost his leading domestic search engine company, Yandex millions of losses on the stock market over the summer when he called the Internet a “CIA invention” and said the presence of foreigners on Yandex’s board made it suspect.

With restrictions on bloggers, demands to make Internet providers do more monitoring of customers on behalf of state intelligence and the blocking of sites, Putin has been harming Internet business, not encouraging this sector where Russia could excel with its educated specialists. Silicon Valley is filled with numerous Russian ex-pats who find better-paying jobs and freedom for entrepreneurs in the US. Putin didn’t mention the failed project of Skolkovo or other modernization efforts.

Medvedev, once curator of Skolkovo and other scrapped modernization projects was caught napping by Unian on RT footage:

The one thing not falling too much, despite the fall in oil prices and the value of the ruble, is Putin’s approval rating: