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Prior to the meeting, the President toured the Academy’s training and laboratory building and the training and research centre, and examined the Academy’s comprehensive development plan.

The Peter the Great Military Academy of Strategic Missile Forces is one of the largest military training institutions of the Russian Armed Forces. The Academy trains commanding officers and military engineers, and conducts research in the main areas related to the Strategic Missile Forces.

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President of Russia Vladimir Putin: Comrades officers,

Before I begin, I want to congratulate the Armed Forces, primarily, the Strategic Missile Forces, on such a remarkable new facility. It is not just a modern [facility], but a facility that makes it possible to train personnel and develop the sector in the broadest sense of this word according to the latest and most advanced standards. This is extremely important, and I want to thank the Defence Ministry’s senior officials for this.

I would like to start also by expressing my gratitude to the servicemen who took part in the anti-terrorist operation in Syria, and I want to thank the entire Armed Forces personnel.

The Defence Minister will report on this in more detail. I will only say the main thing, which is that in fighting international terrorism, an absolutely global threat, our soldiers and officers acted bravely, professionally and, importantly, effectively, demonstrated the qualitatively new modern capabilities of the Armed Forces of Russia and made, without any doubt or exaggeration, a decisive contribution to defeating the most capable group of international terrorists.

You are aware that, in fact, it was more than just a group. It was an entire terrorist army, which was well organised, united, trained and armed, which directly threatened our country, and, admittedly, the entire world.

In cooperation with the Syrian troops, Russian forces have liberated practically the entire Syrian territory from the gangs of militants, saved the lives of hundreds of thousands of people, preserved Syria’s statehood and opened opportunities for political settlement of its domestic conflict. The actions of our army and navy can only be described as excellent.

We will always remember the feat of our comrades-in-arms who perished defending Russia and our people. Our human, moral and ethical duty is to support their families. The state and their fellow servicemen will do everything for this purpose.

Please honour their memory with a minute of silence.

(Minute of silence.)

Colleagues, the situation in Syria, with which I started and the military political situation as a whole, confirm the correctness and timeliness of our decisions to consolidate the army and navy and channel the required resources into active military development.

We have worked hard in the past few years – we have completed deep structural reforms of the Armed Forces and enhanced the efficiency of the entire system of military administration.

We are steadily re-equipping all branches and arms of our Armed Forces. I will cite only a few figures that demonstrate the dynamics of this process. In 2012 modern weapons and hardware accounted for 16 percent in our troops, whereas now, at the end of 2017 it increased to about 60 percent and should reach 70 percent by 2021.

Six large-scale inspections conducted this year have confirmed the high readiness of our forces, their ability to quickly strengthen their units in the Arctic and to create self-sufficient and effective groups in other key areas of national defence.

The Zapad-2017 joint Russian-Belarusian strategic military exercises aiming to maintain the Union State’s security became an important stage of combat training programmes.

In the upcoming years, we must continue working consistently and to ensure the Armed Forces’ qualitative development. Here, I would like to underscore the following: we can see that the world is experiencing a real economic, technological and educational revolution. Obviously, these profound transformations will also inevitably influence the military sphere and the state of leading countries’ armies. Apart from merely heeding these trends, we must make them the foundation of our military planning and development.

Russia should remain among the leading states, and in some areas, it must become an absolute leader in the creation of a new-generation army that would fit into a new technological era. This is of paramount importance for our sovereignty, peaceful life and security of Russian citizens, ensuring the country’s confident development and implementing an open and independent foreign policy line in the interests of our country.

We must focus on the following high-priority aspects of our current and future work. First, we must closely monitor changes in the global balance of power and the military-political situation, primarily near Russia’s borders, as well as in strategically important regions that have key significance for our security. This also concerns the Middle East, the Korean Peninsula, where a high potential for conflicts persists, as well as Europe, where NATO and the United States continue to rapidly build up their infrastructure. As you know, NATO and the United States have recently outlined their defence strategy. It is an offensive strategy, to put it in diplomatic language, and in military language it would be called aggressive. We need to take this into account during our practical work.

Let's be clear: this is offensive infrastructure that is being created in Europe. This is about violations of provisions of the 1987 INF Treaty by the United States, unfortunately. Many in this audience are well aware of what I am talking about.

For example, multipurpose missile launchers have already been deployed in Romania, and are being deployed in Poland, as part of the missile defence system. Formally, they are deployed for interceptor missiles, but the point is, and experts are well aware of this, they are multipurpose units. They can be used to launch existing sea-based cruise missiles with a range of 2,500 kilometres and, in that case, they cease to be sea-based missiles, and can easily be moved to land. That is, anti-missile launchers can, at any time, become units for medium-range cruise missiles.

Another example: target missiles used by the United State for testing anti-ballistic missile systems are identical to medium- and shorter-range ballistic missiles. They are already there and are operational. Their production in the United States may indicate the development of technologies outlawed by the INF Treaty.

Also, the Pentagon received funds for creating a mobile ground-based missile system with a range of up to 5,500 kilometres in 2018. Thus, the United States is, in fact, working towards violating the INF Treaty. They never stop looking for some kind of violation on our part, while consistently engaging in violations themselves, just like they consistently and persistently sought to pull out of the Anti-Ballistic Missile Treaty, which, eventually, as we know, they did in a unilateral manner. Of course, this significantly reduces the level of security in Europe and the world in general.

We have the sovereign right and every capability to respond adequately and rapidly to such potential threats. If necessary, please promptly prepare and submit substantiated proposals on adjusting military planning documents seeking to improve the level of our country's defence capabilities.

Second, our new State Armament Programme will get underway next year. We discussed its key features in May and November at our meetings in Sochi and numerous meetings in Moscow. A special emphasis must be made on equipping troops with high-precision air, land and sea weapons, unmanned airstrike complexes, and individual equipment for servicemen, as well as advanced reconnaissance, communication and electronic warfare systems.

It is necessary to ensure efficient, smooth implementation of the plans from the very first months. Obviously, we will continuously monitor this process as we did with the previous armament programme.

Third, as I noted we are detecting further attempts to upset strategic parity by deploying the global missile defence system and conventional attack systems that are comparable to nuclear weapons. In terms of strike power and accuracy, they are hardly inferior to nuclear arms. What are they designed for? I believe they serve only one purpose, blackmail, because they create the illusion of a potential unpunished strike.

Today our nuclear forces reliably ensure strategic deterrence but we must develop them further. By the end of 2017 the share of modern weapons in Russia’s nuclear triad reached 79 percent and by 2021 they should be equipped with modern arms by up to 90 percent. I am referring to missile systems that are capable of confidently overcoming existing and even projected missile defence systems.

Fourth, we must substantially enhance the mobility of our Armed Forces. This concerns organisation of their logistics and supplies, and an ability to be promptly deployed and operate wherever national security demands.

It is essential to consolidate the potential of our Special Operations Forces. I also request a review of the issue of equipping, the qualitative and quantitative strengthening of the Airborne Forces.

During next year’s Vostok 2018 military exercises, the Armed Forces should practice transferring a large group of personnel with ground equipment and aviation over several thousand kilometres and deploying it in new areas.

Comrade officers,

Bolstering social guarantees for servicemen and their families has been and remains one of the state’s most important tasks. Now the economy is recovering. We have resumed annual adjustments of service pay and consider this a priority of our budget for the next three years. Over 82 billion rubles will be allocated to Defence Ministry servicemen alone for this purpose in the next three years. Simultaneously, military pensions will be increased from January 1.

We will continue improving the system of medical support and health resort services for the service members and their families, and helping them resolve their housing issues. This year 9,000 of them received permanent housing and over 31,000 received service housing. In all, 457,000 of enlisted personnel have received housing in the last five years.

The image of military towns is changing. The largest of them have sports and entertainment centres. Much has been done to improve the work of housing and utility services. Meanwhile, in some military towns it is still difficult to find places for children in kindergartens and schools. I know it because people write to me about these problems and the number of appeals is growing.

I would like the Defence Ministry to pay more attention to this problem. The commanders of districts, fleets and military towns should step up their cooperation with the local authorities in resolving this and other issues concerning life in military towns. I know that heads of regions and large municipalities are always ready to help but it is necessary to work with them more actively.

In conclusion, I would like to thank once again the commanders and all military personnel of the Armed Forces for the results we have achieved. I know that each of you will continue to honestly and conscientiously serve Russia and our people. I wish you success.

Thank you very much.

Defence Minister Sergei Shoigu: Comrade Supreme Commander-in-Chief,

Thank you for your high assessment of the military operation carried out by the Armed Forces. It would have been impossible without your personal attention to the Army and the Navy and the almost constant coordination of our activities in Syria.

More than 48,000 Russian service members, of whom over 14,000 were presented with state decorations, received invaluable combat experience in Syria with 80 percent of the operational-tactical crews and 90 percent of the army aviation crews having 100 to 120 sorties under their belts. The long-range aviation crews practiced striking at important militant targets. In total, the Aerospace Forces carried out 34,000 sorties over the course of two years.

Pilots of sea-based aviation from the heavy aircraft carrier Admiral Kuznetsov participated in combat operations for the first time, with 420 sorties. High-precision long-range missiles, such as Kalibr, X-101, Iskander, Tochka-U, and X-55, to name a few, were used to hit the most important targets.

Ships and submarines performed 100 strikes, and strategic aviation delivered 66 strikes at a range between 500 km and 1,500 km. Each missile hit the assigned target.

The task of eliminating the leaders of illegal formations and terrorist facilities located deep behind the frontline was accomplished by the Special Operations Forces. They also coordinated air strikes and artillery fire using the latest guidance and targeting systems. The Special Operations Forces demonstrated high professionalism and readiness to perform the most complex tasks.

The S-400, S-300V and Pantsir complexes, in conjunction with fighters, ensured the total dominance of our Aerospace Forces over Syrian airspace. There was not a single violation of the security areas of Russian bases in Tartus and Khmeimim. The capabilities of the Pantsir complex, which were expanded to include the ability to intercept rockets and other small targets, made it possible to destroy 16 unmanned aerial vehicles, and 53 multiple-launch rocket system missiles.

We tested most of our military equipment during the Syrian operation, that is, 215 types of weapons. In combat, 702 defects and problems were identified, 99 percent of which were eliminated. We are grateful to our industry partners for their prompt actions.

As a result of the operation, 8,000 units of armoured vehicles and pick-up trucks outfitted with heavy machine guns were destroyed, plus 718 factories and workshops that made weapons and ammunition; 60,318 militants were taken out, including, 819 leaders of illegal formations and 2,840 nationals of the Russian Federation.

Our aviation achieved the critical goal of depriving terrorist organisations of their sources of revenue from sales of petroleum products, which amounted to at least $3 million a day; 396 illegal oil wells and refineries, as well as 4,100 fuel tankers, were destroyed.

Backed by the Russian Aerospace Forces, the Syrian government troops and militias liberated 1,024 populated areas from terrorists, including such major cities as Aleppo, Palmyra, Oqeirbat, Deir ez-Zor, al-Mayadeen and Abu Kamal. This enabled 1,300,000 refugees to return to their homes.

In Aleppo, in order to avoid massive casualties, a humanitarian operation of unprecedented scale and complexity was carried out. As part of this operation, 28,752 persons were evacuated within four days. Humanitarian corridors for civilians were opened. Centres of temporary accommodation, food services and medical aid were deployed. There was no experience of conducting an operation like this during an armed conflict.

For the first time, four de-escalation zones were established in order to end the civil war. They paved the way for a ceasefire between armed opposition formations and Syrian government troops with Russia, Iran and Turkey acting as the ceasefire’s guarantors.

Thanks to efforts by the Russian Centre for Reconciliation, as many as 2,301 populated areas with an overall population of 10,500,000 million joined the ceasefire.

Humanitarian aid to the Syrian people is delivered regularly: 1,696 humanitarian deliveries were carried out, during which 700,000 civilians received food aid. The United Nations and the International Committee of the Red Cross provide assistance in the delivery of humanitarian supplies.

Russian engineers cleared mines from 6,533 hectares of land, 1,410 km of motor roads, and found and destroyed 105,054 explosion hazards. Officers of the Russian International Mine Action Centre in Syria established a branch to train demining specialists. In all, 740 Syrian army servicemen have been trained and can now detect and destroy explosive objects on their own.

Russian military medical workers provided assistance to 66,852 civilians, including 435 that were evacuated to hospitals on Russian territory in special medevac modules.

Let me emphasise that the military operation in Syria was conducted within the limits of the allocations initially provided to the Defence Ministry by streamlining operational plans and combat training. Additional expenses related to increased use of ammunition and the need to repair hardware were earmarked by redistributing the funds of the state armament programme without changing its major parameters.

Speaking about the operation in Syria, it is necessary to recall the implementation of our President’s initiative on the destruction of Syrian chemical weapons in 2013. It removed the threat of strikes by American cruise missiles on Syrian territory and the violent overthrow of the current government, as was the case in Yugoslavia, Iraq and Libya. In all, Russia, the United States, France, Italy, China and Finland jointly withdrew and destroyed 1,300 tonnes of chemical weapons.

Today, Russia’s air group of the Aerospace Forces at Khmeimim air base and the Russian naval support and maintenance facility in Tartus are fully operational on the territory of the Syrian Arab Republic. Modern military and social infrastructure has been built there, which makes it possible to maintain strategic stability in the region and deter terrorist groups from getting into Syria.

Preparations are being conducted for the Syrian National Dialogue Congress to create the conditions for a political settlement of the conflict. Representatives of all Syrian ethnic and religious communities, political parties and armed groups have been invited to attend it.

Now I will speak about the main results of this year. In the Strategic Missile Forces, three regiments were equipped with Yars ground mobile missile systems. Strategic aviation nuclear forces received three modernised planes.

Now on general purpose forces. The Land Force has new means of control as well as 18 new formations and military bases. It has also received 2,055 new and upgraded weapons, which equipped three formations and 11 military bases.

We have established a logistics aviation division as well as a special aviation division in the Aerospace Forces, which received 191 modern aircraft and helicopters and 143 air defence units. Starting this December, we have a unified space system on trial airborne alert.

The Navy has received 10 ships and combatant crafts, 13 logistics vessels and four Bal and Bastion coastal defence missile systems. Naval aviation has received 15 modern planes and helicopters. The command of the 14^th army corps has been established in the Northern Fleet.

Separate air assault and recovery battalions have been established in the Airborne Forces equipped with 184 new armoured vehicles and self-propelled guns.

The Armed Forces have gained 59 complexes representing 199 unmanned aerial vehicles.

The capabilities of the unified tactical control system have met all the requirements set by the Defence Ministry. During military exercises, we have managed to reduce organisation times by 20–30 percent, and by 1.5–3 times for combat control.

In general, the measures envisaged in the 2017 state defence order have been fulfilled.

The Armed Forces’ real capacity to carry out missions has been confirmed by six snap inspections, which involved all military districts and military branches as well as federal and regional state agencies of the Russian Federation. Today, the snap inspections are the main way that the combat training of the Armed Forces is assessed.

We have had about 15,000 different training exercises this year, which is 20 percent higher than last year. The intensity of joint training has also grown 16 percent, and the number of bilateral drills has doubled.

The most significant event of operational training was the Zapad-2017 Russian-Belarusian military exercises. Our armies confirmed that they are ready to protect the Union State of Russia and Belarus by force of arms.

This year, military cooperation activities included 90 countries. Thirty-five international exercises of various levels were conducted, the most ambitious of which were Combat Brotherhood, Naval Interaction and Indra.

The annual Moscow Conference on International Security this year was attended by a record number of delegates – over 800 representatives from 86 countries and eight international organisations. In 2017, 44 conference and exhibition events were held in Patriot Park of the Ministry of Defence. The key event of the year in this sphere was the ARMY-2017 International Military-Technical Forum. In terms of organisation and the number of participants, it equalled the world's leading arms exhibitions.

Following the Supreme Commander-in-Chief’s instruction, the Main Naval Parade was held in St Petersburg for the first time in recent Russian history. It confirmed the status of Russia as a strong naval power. In accordance with your decision, this parade is now annual and next year will be combined with the Naval Salon.

Comrade Supreme Commander-in-Chief,

With the opening of the Petrozavodsk Presidential Cadet School, your instruction to establish a network of such educational institutions covering all federal districts was fulfilled. A branch of the Nakhimov Naval Academy in Murmansk was opened.

But we will not stop here. Next year, two integrated training centres will be opened in the Nakhimov Naval Academy in St Petersburg following your instruction, as well as a physics and mathematics school for gifted children at the Military Academy of the Strategic Missile Forces here in Balashikha.

Thanks to the opening of an integrated clinic of the Kirov Military Medical Academy, the Ministry of Defence was given the opportunity to provide a full range of high-tech medical care at the level of international standards. The clinic's performance indicators are comparable to world indicators: more than 35,000 inpatients per year, 19,800 surgeries, of which 16,000 are complex and high-tech.

A telemedicine system has been established and is operating effectively on the basis of the Academy. It allows for consulting medical staff and monitoring the condition of critical patients in all garrisons. For the military in the Arctic alone, over 100 emergency and planned telemedicine consultations have been conducted over the year. In general, the overall servicemen morbidity was reduced by seven percent.

In accordance with your decision, special funds for the construction of military infrastructure for new equipment have been included for the first time in the state programme. This made it possible to fully synchronise the completion of facilities under construction with the delivery terms of modern weapons. This year, 3,287 buildings and premises with a total area of 3,200,000 square metres were built, which is six percent more than last year’s figures.

As part of the construction of 25 production and logistics complexes, the first pilot complex Nara was put into operation this year. This will ensure the reduction of 25 large storage facilities and optimise the cost of their maintenance.

Thus, the tasks of 2017 have been completely fulfilled by the Defence Ministry.

With the 2018 elections so close, we certainly need to sum up the development of the Armed Forces for the past five and a half years under the leadership of the Supreme Commander-in-Chief.

I will begin with assessing the growing threats. Since 2012, the numbers of NATO military contingents deployed on Russia’s western borders have increased three-fold. Four battalion task forces and a US Army armoured brigade are stationed in the Baltics and Poland; the multinational NATO divisions are headquartered in Poland and Romania. NATO priority forces have increased from 10,000 to 40,000, and their notice period has been reduced from 45 to 30 days.

The US missile defence system in Europe has been brought to the level of initial operational readiness. Its components are also deployed in Japan and South Korea. The intensity of NATO aerial reconnaissance actions at our borders has increased 250 percent, and marine reconnaissance, 50 percent. But we resolutely shut down any attempts to violate Russia’s air and sea borders.

NATO has doubled the frequency of military exercises near our borders. In 2014, the Alliance conducted only 282 exercises; in 2017, as many as 548. Annually, more than 30 exercises are conducted on Russia’s western borders, their scenarios based on armed confrontation with our country. We carefully monitor every NATO doctrine and take appropriate measures.

To respond to new threats and maintain strategic balance, we have expanded the area for long-range aircraft and marine patrolling. Over the past five years, 178 strategic air patrolling flights have been carried out by strategic missile carriers, and the Russian Navy ships have made 672 trips to all strategically important areas of the World Ocean.

Efforts have been made to improve the quality of the Russian Armed Forces. Over the period of five years the Armed Forces have acquired 80 intercontinental ballistic missiles, 102 ballistic missiles for submarines, three Borei-class strategic missile submarines, 55 spacecraft, 3,237 tanks and other armoured combat vehicles, more than 1,000 aircraft and helicopters, 150 ships, six submarines, and 13 Bal and Bastion coastal defence missile systems.

This made it possible to arm 12 missile regiments with the new Yars systems; 10 missile brigades with Iskander systems; 12 aviation regiments with MiG-31BM, Su-35S, Su-30SM, and Su-34 aircraft; three army aviation brigades and six helicopter regiments with Ka-52 and Mi-28 helicopters; 16 anti-aircraft missile regiments with S-400 air defence missile systems, 19 divisions with Pantsir-S systems, and 13 divisions with Bal and Bastion missile systems. Thirty-five combined-arms groups have been provided with Ratnik-2 modern combat gear. The new equipment the army units received is deployed on a modern infrastructure base.

For the first time in modern Russian history a continuous radar field of a missile attack warning system has been created along the perimeter of our borders. This was achieved through the deployment of six new high-operational compatibility Voronezh radar stations, and the finalisation of three active radar stations, Daryal, Dnepr and Volga.

As a result of the State Armament Programme’s implementation, the army and navy are 59.5 percent equipped with modern weapons. In the Strategic Nuclear Forces, the share of modern equipment is 79 percent, in the Land Forces, 45 percent, in the Aerospace Forces, 73 percent, and in the Navy, 53 percent.

In order to make budget spending more effective, the Defence Ministry has introduced a unique information system to control the movement of money allocated to finance the state defence order. We have managed to overcome negative tendencies related to the overadvancing of industry and full payment on unfulfilled contracts. The volume of arms and military equipment delivery has grown while the prepayment on the signed contracts has decreased. The state defence monitoring system we have created makes it possible not only to see what the budget money was spent on and how the state defence order impacted the economy, but to assess its effectiveness.

Some people think that military spending is used only to maintain the army. This is not true. About 60 percent of the military budget is spent on high-tech products from defence industry companies located in all regions and influencing their development. The federal and regional budgets receive more than 480 billion rubles in taxes due to the contributions of the defence industry companies. Expenditures on personnel (salaries) in the sector exceed 440 billion rubles a year.

This means that a stable state defence order involves re-equipment of the army, population income (wages), state income (taxes) and business income (profit). In fact, the money allocated for financing the army is state investment, which provides for the development of various economic sectors as well as Russian regions. It guarantees the growth of the scientific, technological and industrial capacities of companies as well as the new jobs created for and held by highly qualified specialists.

Those who think that our military expenses are too high do not know, probably, how it was done in the 1990s. The military budget was reduced every year: in 1992, it was 16 percent of the GDP, and in 2000, it was already 2.6 percent, or $5 billion. It did not reflect the real needs of the Armed Forces: the military infrastructure was not developing, little equipment was received and wages were not paid on time, so specialists were leaving the army. In fact, Russia had Armed Forces but no battle-ready units and bases back then.

Starting in 2000, we managed to increase the combat potential of the army and the navy. Since 2012, the share of advanced military equipment has grown almost four-fold, military construction – 15 times, the number of military personnel – 2.4 times and the intensity of military training – by 30 percent. At the same time, the military budget is balanced, meets all the demands of the Armed Forces and will account for 2.8 percent of the GDP, or $46 billion, next year, when it will be over $700 billion in the US, about $60 billion in the United Kingdom and $40 billion in France and Germany. Enough said.

Today, the Russian Army is upgraded, mobile, compact and efficient. We do not engage in sabre-rattling and have no intention of fighting anyone. At the same time, we do not advise anyone to test our defence potential.

The newly established National Defence Control Centre of the Russian Federation has radically changed approaches to building a management system for the military organisation of the state. As we established it, we advanced to the fifth-generation control system. The data platform of the National Centre allowed for uniting 158 federal and regional bodies of power, 1,320 state corporations and enterprises of the military industrial complex in a single system.

One of the Centre’s peculiarities is the round-the-clock monitoring and control over the execution of the state defence order. As a result, the implementation of the state defence order increased to 97 percent. Nothing like it has ever been created in the world.

The composition of professional military personnel has undergone significant changes in the past five years. The number of conscripts has fallen by 50,000 from 290 to 240 thousand, whereas the number of contract soldiers increased from 162,000 in 2012 to the current 384,000. The selection quality has improved: 70 percent of enlisted contract soldiers have a university degree or secondary professional education. Today, military formations and units have 95 to 100 percent of professional military personnel, making it possible to keep the Russian Army in the state of high combat readiness. The Russian Defence Ministry’s higher education network comprises 36 institutions and fully provides the Armed Forces with qualified specialists.

Within a short period of time construction was completed of facilities at the Kirov Military Medical Academy, Margelov Ryazan Higher Airborne Command School, Peter the Great Military Academy of Strategic Missile Forces where we are today.

The information and education environment of military schools is developing, a unified e-library for military schools has been set up. Just one year of its effective operation led to a considerable increase in the training quality of military personnel and the level of knowledge acquired. Moreover, the introduction of electronic education resources into the military units has expanded the possibilities for continuous professional training of service personnel throughout the duration of their service.

Research companies [of troops] have become a reliable resource for raising the military research capacity of the Armed Forces. Approximately one in every four servicemen decide to reenlist when their conscription is up. Since such companies were formed, the total number of service members who became officers totals 365.

The social welfare of service members is a priority of the state. In the past five years, 457,000 people have had their right to housing honoured with 149,000 living in service apartments, 120,900 got permanent housing, 107,700 servicemen were given tax-free housing allowances for rented residences, and 79,400 obtained a residence under the Savings and Mortgage System.

Rent subsidies, a new system of providing housing, has demonstrated its effectiveness – since 2014 it was used by 24,100 servicemen. The rent subsidy made it possible to solve long-term problems for servicemen under command. Since 2016, allowances to officers for renting residences were raised to reach the country’ average amount.

The massive use of standard and modern technological projects resulted in the best prices for the facilities under construction. This allowed for the cost of one square metre of constructed facilities of the Defence Ministry to be under 32,000 rubles which is below the national average. In total, 10,221 buildings and facilities have been built in the past five years. Each ruble invested yields one ruble and forty kopeks in fixed assets. Construction is underway throughout the whole country including the Arctic regions and military bases abroad.

Overall in the past five years, 425 facilities with a total area of 700,000 square metres were commissioned in the Arctic on the islands of Kotelny, Alexandra Land, Wrangel, and on Cape Schmidt. They accommodate over a thousand service personnel as well as special armaments and equipment. Innovative and energy-efficient technologies were used in their construction. Three unique complex military facilities were built in the Arctic – the “Arctic trefoil.” Construction is ongoing on a fully operational airfield on Franz Josef Land Archipelago which will be capable of accepting airplanes all year round. No country has ever implemented such large-scale projects in the Arctic under the severe conditions of the Far North.

Released military property has been transferred to regions and municipal authorities of the Russian Federation – 1,396 military towns that had no prospects of use; 56,000 property assets, including 525 boilers, 40 schools, 439 kindergartens and 244 medical facilities. This transfer has made it possible to release about 40,000 civilian employees of the Defence Ministry and save 3.7 billion rubles allocated for the upkeep of unused military towns.

The Defence Ministry has fully carried out the Government’s programme on transferring 467 kindergartens to local self-government bodies. We hope the municipal authorities will honour their commitments to provide places for children of military service members in these pre-schools. As for the Defence Ministry, it will take all the necessary measures to fulfil your instruction.

The Defence Ministry has adopted an approach towards concluding life cycle contracts, recovering maintenance bodies in military units, and carrying out planned repairs at its own and other defence industry enterprises. As a result, up to 94 percent of arms and equipment are now in good shape that is maintained.

The Defence Ministry is getting rid of the dead load of extrinsic functions and tasks that are a heavy burden shouldered by the army. The transfer of 110 military plants with a workforce of about 30,000 to the Rostec State Corporation and the Ministry of Industry is being completed for this purpose. This will make it possible to ensure the development of these enterprises in the national defence industry.

The Armed Forces are completing their work to eliminate environmental damage in the Arctic. They have cleaned 100,740 square metres of land on the Novaya Zemlya Archipelago, Alykel airfield, and Kotelny and Wrangel islands. In all they collected 16,000 and removed 10,000 tonnes of scrap metal. All of 432 buildings slated for demolition have been taken down. Another 13,155 square kilometres of land will still have to be cleaned.

The Defence Ministry has carried out its Efficient Army programme since 2014. As a result of its implementation, we did not need to attract additional funds for unforeseen expenses that occur during the entire fiscal year. Some 129 billion rubles have been saved in three years. The saved funds were used to cover the shortage of money for basic indicators of material-technical support and utilities.

By upgrading its communal services, the Defence Ministry saved 7.8 billion rubles. The work of the recovered line maintenance bodies in army units makes it possible to save about 2.8 billion rubles per year. The introduction of the access control system and food orders in 729 canteens saved over 1.6 billion rubles. The repair centres and shops restored in warehouses made it possible to fix 1.7 million missiles and ammunition (their purchase would cost the budget 117 billion rubles). About 70,000 modern ammunition containers have been purchased and put into warehouses. This amounts to an annual savings of up to 700 million rubles.

These are far from all the measures carried out under the Efficient Army programme. By the end of 2020 its measures will have saved 337 billion rubles.

Oil companies have put eight fuel service complexes into operation on military airfields and the construction of another five complexes is nearing completion. I would like to thank the leadership of the oil company Gazpromneft for this. Next year, another two companies will join the project: Rosneft will build nine complexes and Lukoil another three.

The construction of 580 ammunition supply bunkers for several hundred thousand tonnes of ammunition will soon be completed in a move to improve and optimise locations for storing weapons, rockets and ammunition.

The International Army Games are attracting more and more interest from abroad with each passing year. It all started with a military competition in tank biathlon that eventually developed into a large-scale international event to evaluate military skills and the reliability of military hardware. The number of competing countries has increased to 28. It was the first time that the games were held on the territory of five countries – Russia, Azerbaijan, Belarus, China and Kazakhstan. In the run-up to the games, 149 training grounds have been modernised.

On the Defence Ministry’s initiative and with support from the Supreme Commander-in-Chief, the Yunarmiya youth movement has been created, which now brings together 188,000 youth. Within a short space of time, it has become one of the most popular youth organisations in the country. About 16,000 youth attended Yunarmiya athletic and patriotic camps. This work will spread to other regions in Russia.

Sociological data shows what has been achieved over a five-year period. Since 2012, the proportion of Russian society that approves of the Armed Forces’ activities has been steadily going up. Negative marks have declined by 77.8 percent, from 31 percent to 7 percent. Today, 64 percent of Russian nationals believe that serving in the Army is a good experience for youth. Currently, 93 percent of the population in the country, an all-time high over the entire period of sociological research, have confidence in the Russian military. Such a strong vote of confidence requires that we live up to people’s expectations.

In 2018, the Defence Ministry will have to address the following key tasks: bring the proportion of modern weapons and equipment in the Armed Forces to 61 percent of the total, specifically to 82 percent in the Strategic Nuclear Forces, 46 percent in the Land Forces, 74 percent in the Aerospace Forces and 55 percent in the Navy.

The task for Strategic Missile Forces is to put 11 launchers carrying Yars ballistic missiles on full combat alert; commission six modernised strategic missile carriers; and introduce the lead nuclear underwater Project 955A cruiser Knyaz Vladimir carrying Bulava ballistic missiles into the Navy.

The task for the Land Forces is to create seven military formations and units and supply over 3,500 items of new weapons to them.

The task for the Aerospace Forces and Navy aviation is to supply 203 new and updated aircraft and helicopters, four divisional sets of the Pantsir anti-aircraft artillery weapon systems and 10 divisional sets of the S-400 Triumf anti-aircraft weapon systems and ensure the fulfillment of the pilot combat duty tasks assigned to the single space system.

The Navy is to accept 35 ships and supply vessels into service; we are to prepare and conduct the Vostok strategic command exercise; support the development of the financial monitoring system for the state defence order with respect to oversight and estimating the optimum cost level for manufacturing arms and military equipment; finish overhauling and building 11 air fields, including Severomorsk-1, Mozdok, Baltimor, Belbek, Alykel, Chkalovsky in Kaliningrad Region; open 3,000 buildings and facilities; set up the Era innovative military science park.

Comrade Supreme Commander-in-Chief, the momentum that the Armed Forces have gained will continue into next year. Solutions were found in the course of addressing problem areas and they will be taken into account in the Defence Ministry plans for 2018.

This concludes my report.

Vladimir Putin: Colleagues and friends,

In his report, the Minister covered practically everything. I will add a few words to what has been said by us both. We know very well that the number of challenges in today’s world is growing rather than going down. We mentioned the fact that NATO infrastructure is getting closer to our borders.

Actually, when we move our forces on our territory, it is perceived and portrayed as a threat to somebody, but when foreign military bases and infrastructure approach our borders and new complexes are deployed, that is perfectly fine. At least that is what those who do it think, but not us.

We understand that the number of threats is growing. Take the US military defence doctrine that I have mentioned already. It was recently presented to the world and the US people. and it is definitely marked by an offensive-minded if not to say aggressive posture. This doctrine is not just words or a piece of paper, it is underpinned by concrete actions and funding: the US spends over $700 billion on defence, or, to be more exact, military purposes.

It is true that we sometimes hear that our defence budget is very large. As the minister just mentioned, it is $46.6 billion, that is all. Last year it was 4.1 per cent of the GDP, which is a lot for the Russian economy. Still, it was not linked to exceeding our operating expenses last year or the year before.

Last year, this increase in the share of GDP was caused by the decision to repay the loans, which the Defence Ministry had to take in order to implement the armament programme. It is not that the ministry had to borrow – it coordinated the move with the Government and, naturally, with the Finance Ministry. That is, every year over the recent period the funding was regular and met the target figures but part of it was borrowed money. When the loan amount had accumulated, the Government decided to allocate additional funds to repay the loans. The Defence Ministry did not spent more than it had previously announced, however, formally, the share of GDP increased.

Next year, the share in the GDP will be a bit more than 2.8 percent – 2.85 percent or 2.86 percent – and later it will even start to edge down. This begs the question: can we be self-reliant in these circumstances, given the potential we have, and can we reliably and unconditionally ensure that our country’s defence capability is maintained. We can, we must and we will do it.

One may ask, how will we do it? Alexander Suvorov taught us that the thing that matters at war is skill rather than numbers. We have plenty of good proverbs, for example, this one: You do not need wits if you have strength. However, we need to have our wits about us. We will not rely only on the military muscle and we will not rush into a senseless arms race that is crippling for our economy –we will certainly not do that.

What shall we then rely on in addressing the matters of defence capability and security? The answer is very simple: on brains, intellect, discipline and organisation when handling relevant tasks. We have a remarkable foundation that we have inherited from the past decades but we also have new, absolutely cutting edge projects developed by our young researchers, designers and engineers.

What are the component parts of the funding allocated by the government to the Defence Ministry and other security services? They are maintenance and equipment, and both components have the potential for what we call development, while development is important for both of them. Why is it important for maintenance? Because it can save money, in any case, it can help us avoid squandering money, scattering it like a farmer sowing seeds – rather we can update the maintenance system, making it worthy of our Armed Forces and our military but economical at the same time.

As for the development itself, it is primarily, of course, about modern Armed Forces in the direct sense of the word – modern equipment. It is the development of new, promising, high precision and high technology types of weapons that are unique in terms of their effectiveness. To achieve these goals we need, as I already said, to demonstrate creative approaches, discipline and responsibility. I have no doubt – my confidence is based on the estimates and on our joint work – that we will reliably and unconditionally ensure that our country’s defence capability is maintained.

There is something else that we rely on in our estimates. There is no irony in my words: we rely on our peaceful foreign policy. It is important because we do not need an endless number of military bases around the globe and we do not plan to take on the role of a global policeman. We do not need this by definition simply because this costs a lot of money and is not in our plans altogether. If we all keep this in mind and fulfil all this in a disciplined, creative and responsible manner, we will deliver on the task as the Russian people expect us to do: we will reliably and unconditionally ensure that our defence capability is maintained, create conditions conducive to peaceful life and development in all areas, including the economy and social sphere.

I would like to wish you every success and good luck in this very important work. Thank you for your service. Please accept my New Year greetings!

Thank you.