Russian President Vladimir Putin said yesterday that Russia's main political task was to develop as a free, democratic nation with European ideals, and stressed that individual freedoms would not be compromised by the state's own strengthening.
"We are a free nation and our place in the modern world will be defined only by how successful and strong we are," Putin said in his annual state of the nation address.
Lawmakers from Russia's lower and upper houses of parliament, government officials, governors and religious representatives gathered in the Kremlin's Marble Hall for the speech.
The address -- Putin's sixth of his two-term presidency -- was to outline the main trends of Russia's domestic and foreign policy. It was Putin's second state of the nation speech since he was overwhelmingly re-elected to a second term last year.
Putin is constitutionally barred from seeking a third term, but many Russians assume that the Kremlin will ensure a Putin loyalist wins the balloting in 2008.
After an uninterrupted period of high public opinion ratings, Putin's own popularity has been dented over the past year by street protests over painful social reforms in Russia and his unsuccessful attempts to head off a popular uprising in the ex-Soviet republic of Ukraine.
Putin said the nation's main challenges now were to strengthen the state, boost the rule of law and judicial institutions and deepen respect for both individual liberties and the activities of non-governmental organizations.
On the economy, Putin said tax inspectors don't have the right to terrorize business, and he called on the government to lower the statute of limitations to three years for challenging the results of past privatization deals.
He said Russia needed foreign investment, but added that such investment comes only to those countries where the "rules of the game" are clear.
He also said that Russians should be encouraged to bring their undeclared earnings home rather than hide them away in offshore accounts.
"That money must work in the Russian economy," Putin said.
Russian businesses, particularly in the lucrative oil sector, have increasingly been handed massive past tax bills, a move that analysts have warned could scare away foreign investors. The current statute of limitations for challenging past privatizations is 10 years.
Putin said that the threat of terrorism in Russia remained high, and he said that parliamentary elections scheduled for later this year in Chechnya should lay the basis for stability and democracy in the region. He also stressed that the volatile, impoverished south Caucasus region in particular needed new jobs and infrastructure to boost stability.
Political commentators had expected Putin to stress the need for strong measures to shore up the Russian state, mirroring a recent warning by his chief of staff that infighting among politicians may cause Russia to collapse. They also predicted he would reiterate Russia's commitment to liberal reforms, and try to boost confidence in his earlier -- and still largely unfulfilled -- promises of affordable housing, health care and better living standards.
But unlike past speeches where Putin set ambitious goals for expanding Russia's economy and improving social services, Russia's Izvestia newspaper predicted yesterday that this address could be "one of the most formal" of Putin's career.
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