06MOSCOW4951, PUTIN’S ADDRESS TO THE FEDERAL ASSEMBLY BREAKS

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Reference ID Created Released Classification Origin
06MOSCOW4951 2006-05-10 14:20 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO0780
OO RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHMO #4951/01 1301420
ZNR UUUUU ZZH
O 101420Z MAY 06 ZDS
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5594
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 03 MOSCOW 004951 
 
SIPDIS 
 
C O R R E C T E D COPY TEXT EDITED 
 
SENSITIVE 
SIPDIS 
 
STATE PLEASE PASS USTR FOR DDWOSKIN, SDONNELLY, LERRION 
ALSO FOR INL/AAE 
 
E.O. 12958: N/A 
TAGS: ECON PREL PGOV KIPR KCRM RS
SUBJECT: PUTIN'S ADDRESS TO THE FEDERAL ASSEMBLY BREAKS 
LITTLE NEW GROUND 
 
REF: MOSCOW 4839 
 
MOSCOW 00004951  001.2 OF 003 
 
 
SENSITIVE BUT UNCLASSIFIED; HANDLE ACCORDINGLY 
 
1. (SBU) SUMMARY:  President Putin's hour-long Address to the 
Federal Assembly on May 10 lacked the broad vision for 
Russia's future that some had expected.  In a lengthy 
discussion of economic issues, he stressed national priority 
projects and technological development, and expressed 
commitment to IPR protection.  He reiterated Russia's desire 
to join the WTO but insisted it would be done on mutually 
beneficial terms, whereas unidentified others were seeking to 
use the issue for their own political purposes.  Putin 
devoted much time to Russia's demographic situation, 
describing it as the most acute problem the country faces and 
laying out financial benefits for child-bearing parents as 
among the solutions.  He spoke extensively on military reform 
and on the need to maintain a strong military, but warned 
against repeating the Soviet mistake of spending beyond the 
country's needs on defense.  Instead, Russia would pursue 
asymmetric approaches to ensuring its security.  On the 
foreign policy side, he focused on Russia's "neighborhood," 
casting Moscow as playing a responsible role, and on 
reforming the UN while preserving its prerogatives.  Putin 
did not use terms like "sovereign democracy" nor did he 
otherwise share any broad vision for Russia's future course. 
While he took a few swipes at the West -- including saying 
that some countries were manipulating issues like human 
rights for their own purposes -- he generally took the high 
road in a speech aimed at showing that Russia is confidently 
and realistically addressing its problems.  END SUMMARY. 
. 
ECONOMICS AND DEMOGRAPHICS 
-------------------------- 
 
2. (U) Putin began his address with a lengthy exposition on 
economic development.  Commenting that Russia continued to 
suffer from low public trust in both government and business, 
he said it was essential to tackle those problems -- then 
noted that he had borrowed his words of commitment from 
President Franklin Roosevelt.  Russia must continue toward 
the goals he had set out in previous such speeches, including 
doubling of GDP, but this could only be accomplished if the 
conditions for fair competition, free enterprise and property 
rights were finally put in place.  He devoted much attention 
to his national priority projects, which would improve 
Russians' well-being. 
 
3. (U) Emphasizing the theme of technological development, 
Putin expressed concern that Russia's energy sector trailed 
far behind that of the rest of the world technologically.  He 
noted that state-owned companies were performing well, 
singling out Gazprom as the world's third largest company and 
attributing its success in part to Russian government 
policies.  His approach to the storm created two weeks ago by 
Gazprom CEO Aleksey Miller's suggestion that Russian gas 
would be shifted from west to east was rephrased in a less 
confrontational mode: "we should move into new promising 
markets, while at the same time...meeting our commitments to 
our traditional partners."  Putin also stressed a need to 
develop Russia's atomic energy sector, space and 
nano-technology, all promising areas of growth where 
innovation was essential. 
 
4. (U) Putin made a point of expressing his commitment to IPR 
enforcement, saying that "we should secure the protection of 
the rights of authorship within the country, and it is also 
our duty to our foreign partners."  He also expressed 
continuing interest in Russian membership in the WTO.  While 
noting that some countries sought to use WTO accession for 
their own, non-economic purposes, he stressed that it would 
take place "on terms that took Russia's economic interests 
fully into account."  In addition, Putin spoke of full ruble 
convertibility by July 1 and hoped that the ruble would 
become a major currency on the international stage.  As a 
first step, he called on Russia to set up an exchange to 
trade oil and gas in rubles. 
 
5. (U) As expected, Putin devoted much attention to 
demographics, identifying it as the country's most acute 
problem -- and one on which little progress has been made. 
He cited in that regard Aleksandr Solzhenitsyn's call on the 
Russian government above all to "save the people."  While 
calling for attracting ethnic Russians living abroad back to 
the country, he saw much of the solution to the country's 
demographic problems in providing substantial economic 
stimuli to increase the birth rates in the country.  He did 
 
MOSCOW 00004951  002.2 OF 003 
 
 
not criticize foreign adoptions, but saw the need for 
material incentives for caring for Russian orphans in this 
country. 
. 
NATIONAL SECURITY AND MILITARY
 REFORM 
------------------------------------- 
 
6. (U) Putin then turned to national security.  In a very 
brief reference to terrorism, he noted that it was often 
linked to ethnic conflicts, and commented that unidentified 
"others" hoped that Russia would get bogged down in those 
conflicts and thus be unable to resolve its own developmental 
problems.  He added that some unspecified "others" (clearly 
the U.S.) were using human rights and democracy as a means to 
pursue their own interests.  He also stressed the threat that 
terrorists could seize and use weapons of mass 
destruction.  Putin also expressed concern about 
technological developments that threaten strategic stability, 
such as nuclear weapons in space, and called for renewed 
focus on disarmament.  He underlined as well Russia's support 
for existing nonproliferation regimes "without exception," 
and -- presumably referring implicitly to Iran as well as 
Iraq -- said that "it is known that the use of force rarely 
brings the hoped-for results, and its consequences at times 
are more terrible than the original threat." 
 
7. (U) The U.S. military budget is twenty-five times greater 
than Russia's, Putin said.  He did not explicitly criticize 
that ("molodets," he said, essentially meaning "more power to 
you,"), but referred to a Russian fable involving a wolf that 
"knows whom to eat first."  Russia should avoid the mistake 
of the Soviet Union of trying to spend as much on defense as 
the U.S., and instead should wisely target its defense funds 
asymmetrically for maximum effect.  Russia had already made 
major strides, he continued, citing the launching of two new 
nuclear submarines and the deployment of the TOPOL ICBM. 
 
8. (U) As expected, Putin devoted much time to military 
modernization.  With the camera panning several times on 
Defense Minister Sergey Ivanov, Putin focused on improving 
the prestige of military service, moving toward a 
professional military, and fighting negative qualities among 
youth -- such as drug addiction and alcoholism -- to improve 
the recruitment pool.  He again voiced a patriotic theme, 
quoting the nationalist thinker Ivan Ilin. 
 
9. (U) On the foreign policy side, Putin was short on 
details.  Instead, he kept the focus squarely on pragmatic 
concerns, stressing Russia's relations with its nearest 
neighbors and its continuing reliance on the United Nations. 
He emphasized Moscow's interest in expanding economic 
cooperation in the CIS area and its willingness to help 
resolve regional conflicts.  Acknowledging the need for CIS 
reform, Putin also singled out "parallel" organizations that 
boosted regional cooperation, such as the Union State with 
Belarus, the Common Economic Space, the Eurasian Economic 
Community (EvrAzES) and the Collective Security Treaty 
Organization (CSTO).  Cooperation with the EU, including in 
the energy field, was noted, as was the importance of 
Russia's relationships with the U.S., China and India.  Putin 
put in a plug for the continuing central role of the UN, 
noting that UN reform must be consensual and improve the 
organization's efficiency. 
. 
COMMENT 
------- 
 
10. (SBU) Putin's Address to the Federal Assembly was long 
anticipated, and, as noted reftel, expectations had run high 
that it would lay out a broad vision of Russia's place in the 
world and how it would overcome its current challenges to 
achieve that.  In that sense, the speech fell short of 
expectations.  It offered policy directions on some of the 
key challenges facing Russia, notably technological 
development, demographics and military reform.  And it sought 
to demonstrate that Russia is confident of its ability to 
tackle its problems.  But it lacked any exploration of 
concepts like "sovereign democracy," which some had expected 
to surface, or other constructs aimed at showing a broader 
vision. 
 
11. (SBU) The address took some implicit potshots at the U.S. 
 Most notably, it suggested that some were using human rights 
and democracy issues for their own political gain, and made a 
similar suggestion about WTO accession.  Overall, however, 
Putin took the high road, seeking to show that Russia is 
dealing confidently, realistically and responsibly with its 
 
MOSCOW 00004951  003.2 OF 003 
 
 
problems. 
BURNS

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