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Vladimir Putin: Good afternoon.

Today we have gathered not because of a celebration or of a political event.

You know that in the Address to the Federal Assembly, several major national tasks were formulated in generalised form, such as fighting poverty, doubling GDP in two years, and modernising the Armed Forces. Today we have gathered, in working order, and I would like to stress this, to think and talk about what will happen in this sphere and how. These plans should be understandable not just for the Armed Forces and specialists. They should be clear and understandable for all of society. They must be absolutely transparent: they should be intensive but realisable plans.

In this hall, not just representatives of the army command, but also of the Russian Government are present. The very scale and diversity of tasks in the sphere of military reform dictates such a wide format of discussion.

For the modernisation of the army that we have begun is not just an extremely important state task, but, I stress, a national task.

I must note that in recent years we have been able to achieve a great deal. We have established regular financing of the system of national defence. The legal and doctrinal base has been updated. Serious organisational and personnel changes have been made in the Armed Forces.

From radical reforms that were necessary at a certain stage, we have moved to a step-by-step development of the Armed Forces that is designed for the long-term perspective. We have moved to their profound transformation, a result of which should be an increase in our army’s capabilities. We are essentially moving towards a fundamentally new image of the Armed Forces.

In connection with this, I would like to once more indicate the priority areas of military development.

Firstly, it is improvement of the principles of recruitment. Here we need to keep all the established parameters and dates. And by 2007 the formation of professional units on constant alert should be completed. At the same time, the period of service under conscription should be reduced. We know about this, and have said that these decisions are made together with you, and in fact on your suggestion. The issue should also be decided of bringing in citizens from other countries for professional service in the Russian army.

I would also like to remind you that the corresponding amendments have been made to legislation in the State Duma. They will allow people who serve in the army for at least three years to receive Russian citizenship in a simplified procedure.

The second area is re-equipping the army. In this sphere, important basic documents have already been passed. They create guidelines in the sphere of technical equipment of troops, and coordinate issues of military structuring with tasks of military-technical and military-industrial policies. All the tasks in the state programme of arms and the basis of military-technical policies are fully realisable. We have all the capabilities for their successful resolution.

Furthermore, work needs to be continued on consolidating the defence and industrial complex, and major, competitive holdings need to be formed here.

A fundamentally new system of mobilisation training is also required, a system that corresponds to modern requirements and answers to the nature of new threats.

And finally, we must form a truly modern system of material-technical and social provision for the Armed Forces. Social protection for servicemen should not just entail the gradual increase of their salaries – although this in itself, of course, is extremely important – but also such modern forms as developing a system of insurance and mortgage of accommodation for servicemen. Furthermore, an important task is their professional retraining and increasing their opportunities to find work in civilian life.

I would like to say a few words about another important matter. Beginning in 1992, the Armed Forces were reduced by over half. This was a truly difficult and painful process. Enough! But this process is now essentially complete.

I would also like to note that in the Russian army, the ratio of generals to total staff has become much lower than in such countries as the US, Great Britain and France. We hear a lot about the dominance of generals in the army – this does not correspond to the reality of the present day.

I hope that today we already have a balanced personnel that meets defence requirements. And we do not plan any further major reductions in the Armed Forces.

The transformation of the world order and the appearance of new threats demand constant military and strategic analysis of the situation from us. In modern conditions, when the situation is changing dynamically, the army must be prepared to react adequately to threats that arise. And so its structures, military capabilities, tactics and operative organisation must be flexible and mobile.

Russia consistently fights for a consolidation of the system of international law. We achieve the widest cooperation with foreign nations and international organisations in the security sphere.

But this does not mean that we should give less attention to, or abandon, the development of our defence potential. In the final analysis, this potential is the guarantee of the sovereignty and security of Russia.

We need a strong, professional and well-armed army for peaceful and prosperous development of the country. The army must be capable of protecting Russia and its allies.

It must cooperate effectively with the armed forces of other countries. It must be ready to solve, together with its partners, problems of collective security, the war on terrorism, and take part in peacekeeping operations.

And finally, with its closest allies, it must fight common threats in the zone of our regional responsibility.

Generally, the Russian Armed Forces need new quality. New quality in everything: in military training, military planning, and military science. And there is major work ahead of us in forming a new image of the army, and the entire military organisation of the nation.

I am certain that you well understand the responsibility that lies on the high command and the entire officer’s corps of the country in connection with this.

Thank you for your attention.

* * *

Vladimir Putin:

In my view, the report by the Defence Minister was interesting, in both the conclusions on the current state of the Armed Forces and on the approaches to modernisation.

Most importantly, we know what sort of army we want to have, and which tasks it should be ready to solve.

Generally, I agree with the evaluations and suggestions heard today. However, in the near future we need to solve a number of serious tasks.

It remains to highlight the key points in military planning. This is extremely crucial work. We need to be guided by the dynamics of the military-political situation, and the real capabilities of our economy.

Furthermore, we must implement all the decisions passed to re-equip the army, precisely and at the right time. Issues have been discussed at great length, especially with the General Staff and the economic bloc of the Government – we are obliged to create a significant scientific, technological and industrial reserve for perspective systems of arms. And we should also gradually increase the supply of new equipment to troops.

I would like to pay special attention to the fact that all these complex systems of arms, administration and communications need to be mastered competently and quickly. They need to be mastered on the spot, in military units and subdivisions. You, as the high command of the army and navy, also need to pay particular attention to this.

I would ask you also not to forget about other tasks to increase the level of operative and military training, new principles of recruitment, and optimisation of the personnel of troops and forces.

Reform of military formation should also continue. There should be work on creating a single system of security for the Armed Forces and other armed formations.

We have not yet done everything that we agreed on. Military organisation of the state has not been optimised here yet. I want to stress that here we must be guided not by the departmental interests of the country, but by the capabilities of the economy of our state.

I want to point out that so far the move to a programme method of planning military development is being delayed. At the same time, without this, military planning risks remaining expensive and of little effectiveness. The main foundation of national security in Russia remains, and will remain for a long time to come, nuclear deterrence forces. They are in a very good state, there are plans to develop them, and these plans are realised. I can inform you what the Minister of Defence, the Chief of the General Staff and the Commander of the Strategic Missile Forces know well. There is no state secret here – Russia has a significant supply of ground-based strategic missiles. These are the most impressive rockets – the UR-100 NUTTKh (SS-19). This is a very serious potential, several dozen missiles. Mr Kvashnin, how much is this in terms of warheads?

Anatoly Kvashnin: Several hundred nuclear warheads…

Vladimir Putin: Good. These missiles have not been on military duty for a single day, they have been kept “dry”; and though these were not created yesterday or today, in a certain sense they are new rockets, and the timeframe of their possible use is very significant. But their military capabilities, including in overcoming any systems of anti-missile defence, are outside competition.

Russia has kept to, and will continue to fulfil, its international obligations in restricting the international nuclear potential. At the same time, the treaty that I just mentioned allows the parties that have signed the treaty to keep a significant potential in their stockpile. Russia makes use of the regulations of this treaty in full measure. The heavy missiles at our disposal will be put on military duty as the expiry date runs out for those missiles that are on military duty today.

Thus, we have enough time to work on the creation of new models of weaponry for the 21st century, gradually, without any jumps, but persistently and systematically. I would like to note that Russia has a serious reserve in this area. I will strictly control the fulfilment of all these plans, and make arrangements for modernisation based on our interests and the current situation in the world. We will work with all our state partners, including in very sensitive areas, such as creating systems of anti-missile defence. I talked about principles of organising this work in detail at a meeting with the President of the United States of America at Camp David several days ago.

Summing up our discussion, I would like to note: now, when there is a common understanding of what needs to be done, I would ask you to turn everything that has been discussed into specific plans of work. I would ask the General Staff to present its proposals on planning the organisation of this activity. I would like to remind you that very recently we passed a decision which gave the General Staff the leading position in military development of the state. I expect that the General Staff will take on this task and deal with it efficiently.

I wish you success, thank you.