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Putin’s State of the Nation, Part IV – Infrastructure

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

In our series of articles on the State of the Russian Federation speech given last week by President Vladimir Putin, we covered the objectives and situation reports on the Russian military, her international relations not related to military matters, as in trade, and her top domestic priority – the support and growth of families in the country, ostensibly to counter the declining population that has troubled the Russian Federation for decades. The next section we will cover here is related to infrastructure redevelopment.

Russia remains largely an enigma to those who have never visited the country, and even for many who have. One of the sayings that is widely known and repeated, when translated into English is this, “Russia has only two problems: roads and fools.”

Oddly enough, these two often appear to be linked in discussion of Russian infrastructure, because there have been many cases of corruption, usually at very local levels, where money destined for the buildout of the nation’s infrastructure somehow magically becomes someone’s dacha, or a nice road that leads to said dacha while the citizenry has to negotiate a highway that is often practically untraceable, let alone drivable.

President Putin has been able to get quite a lot of work done to counter this sort of corruption, and some of his activities, like his yearly, or now, twice-a-year television “Direct Line” call in program, feature people sending messages from all parts of this vast country asking for his help about problems they experience in the regions.

Even those people who have visited Russia from the West often see only the great cities of Moscow, St Petersburg or Sochi, but they do not know that just outside these very modern population centers there are amazingly primitive conditions for many people.

President Putin discussed the situation facing Russia now, and offered plans and solutions that are bold and sweeping in the effort to get the country in better shape domestically.

These plans are also not driving the country into debt. In this way the Western sanctions against Russia are extremely beneficial, as they have forced the country to come to rely on sharp handling of its own resources, since much of the world is allied against Russia. In this, Russia has managed to almost eliminate its debt.

President Putin speaks:

I have something positive to share with you. For the first time ever, our reserves fully cover not only the sovereign debt, which is quite small, but also private borrowings. These funds are at work, and investment of the National Welfare Fund generates budget revenue.

Therefore, I would like to address those of our colleagues who constantly criticize the Government, its financial and economic ministries and ask where the money went and where we invested it. We set a target to reach a certain level, after which we can use these funds, although cautiously so as not to cause any macroeconomic disturbances.

We are about to reach this level, and are beginning to do it. The proceeds from these investments go to the federal budget. In 2018, proceeds from investing the National Welfare Fund in the amount of 70.5 billion rubles were added to the budget.To achieve high growth rates, it is also necessary to resolve systemic problems in the economy.

I will highlight four priorities here.

The first one is faster growth in labour productivity, primarily based on new technologies and digitalisation; the development of competitive industries and, as a result, an increase in non-primary exports by more than 50 percent in six years.

The second one is to improve the business climate and the quality of national jurisdiction, so that no one moves their operations to other jurisdictions, to ensure that everything is reliable and runs like clockwork. Growth in investment should increase by 6–7 percent in 2020. Achieving this level will be one of the key criteria for evaluating the Government’s work.

The third priority is removing infrastructural constraints for economic development and for unlocking the potential of our regions.

And the fourth thing is training modern personnel, of course, and creating powerful scientific and technological foundations.

Improving the quality of life for those who work in rural areas is a key long-term factor of the agricultural industry’s steady growth. I would like to point out to the Government that as soon as this year, they must approve a new development programme for rural territories that must be enforced as of January 1, 2020.

One more thing. I think everybody will agree that our massive natural resources constitute our natural advantage. They need to be used for increasing the production of organic produce. I am instructing the Government to create a protected brand for clean products, a brand that will guarantee safety of the technology used and win the reputation of high quality both on the domestic and foreign markets. Trust me, it will be extremely popular abroad. There is hardly anything clean left there…

Colleagues, infrastructure upgrades need to be accelerated using state-of-the-art technology. This is essential for enhancing a country’s connectivity, and especially for Russia, the world’s largest country with its vast territory. This is essential for strengthening statehood, unleashing the country’s potential and driving national economic growth.

This year, the railway section of the Crimean Bridge will be launched, and will become a powerful impetus. I would like to take this opportunity to thank all the construction and railway workers. We saw that a bypass railway was built near Krasnodar alongside an approach railway to this junction from the Caucasus coast. As I have said, trains will begin using the Crimean Bridge in 2019, creating a powerful development driver for Crimea and Sevastopol.

The Crimean Bridge drew much ire from the troubled Ukrainian government, who lost the peninsula in a referendum that resulted from the dissatisfaction of the Crimean people and their neglect by the Ukrainian government. Fur and feathers are still flying in the jilted halls of Kyiv about this.

In addition to this, the expressway linking Moscow and St Petersburg is expected to be completed, creating new business opportunities and jobs for people living in Novgorod, Tver, Leningrad and Moscow regions.

More than 60 airports will benefit from upgrades over the next six years, including international airports in Khabarovsk, Yuzhno-Sakhalinsk and Petropavlovsk-Kamchatsky.

In 2025, the throughput capacity of the Baikal-Amur Mainline and Trans-Siberian Railway will grow 1.5 times, reaching 210 million tonnes, which is very important for the development of Siberia and Russia’s Far East.

Let me reiterate that key indicators related to social and economic development and quality of life in all Russia’s Far Eastern regions are expected to exceed the national average. This is a national cause, and a major priority of our efforts to promote Eastern Siberia and the Far East as strategic territories. All agencies have to constantly keep this in mind.

In September, we will have a meeting in Vladivostok to discuss what each of the federal agencies has done and intends to undertake for the Far East. All the plans for building and upgrading roads, railways, sea ports, air service and communications must prioritise regional development, including promoting these regions as travel destinations.

There is enormous interest in Russia, our culture, nature and historical monuments. Taking into consideration the success of the World Cup, I propose making greater use of e-visas and thinking more broadly about how to streamline visa processing for tourists coming to Russia.

Next. This year we must adopt a master plan for developing the infrastructure of a digital economy, including telecommunications networks, as well as data storage and processing capacities. Here we need to look ahead as well. The task for the next few years is to provide universal access to high-speed internet and start using 5G communications networks.

To achieve a revolution in communications, navigation and systems for remote sensing of the Earth, we must dramatically increase the capabilities of our satellite group. Russia has unique technology for this, but such tasks require a fundamental upgrade of the entire space industry. I am instructing Roscosmos and the Moscow Government to establish a National Space Centre. My colleagues came to me and told me about it. This is a good project, [which] is designed to unite relevant organisations, design bureaus and prototype production facilities, and to support scientific research and the training of personnel.

We see here quite a comprehensive range of ideas. These are only excerpted from the speech, and for more details, we suggest following either our internal link to the speech or going directly to the Kremlin website.


The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

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Sally Snyder
Sally Snyder
February 25, 2019

Here are some interesting quotes from Vladimir Putin about the state of the world today:

Despite what Western media says, Mr. Putin’s approval rating is still the envy of most of the West’s elected leadership.

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Mr Bolton’s Long Game Against Iran – Pakistan Becomes Saudi Arabia’s New Client State