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Vladimir Putin: Dear Oleg Borisovich [Oleg Dobrodeev],

Dear friends!

Allow me to congratulate you on your company's anniversary. During these years it has become the largest broadcasting company in Europe. This is first and foremost to your company's merit, to your merit.

98 percent of the country's population hears and sees the programmes you broadcast. This is a very important service for any society. It is especially important in a country such as ours, one that is at a critical point in its development. Here each word is important for millions of people.

You were able to establish programmes that are unparalleled. It is possible that there are some channels that are just as good. However, none are distributed as widely as, say, your Sport and Kultura, where in addition advertising is forbidden. In today's media business this is no mean feat. I would like to congratulate you and to wish you success. All the best. Thank you very much.

Oleg Dobrodeev: Thank you very much for receiving us Vladimir Vladimirovich because it is really a very important day for our company. We are 15 years old and, if I remember correctly, then the company first started broadcasting a few months before the events of August 1991. Thank you very much for this meeting and I just wanted to briefly outline our plans for the near future.

We are finishing reorganizing the company, something that is mundane and routine yet very important. And two of the most important and very interesting things we are planning are the news channel and a digital package since we all – both our country and television – are living at a time when transition to digital is inevitable.

This digital package will include the channels you just mentioned. That is Kultura, Sport and, of course, Rossiya, the news channel. This is one of our main tasks today.

Dmitrii Kisilev: Vladimir Vladimirovich, the whole world is talking about your Address [to the Federal Assembly] and, of course, all are intrigued by the fact that it is very different from what you said in past years. Of course, everyone would be interested to know how this Address was prepared. How and, more particularly, at what stage did the phrase 'the wolf knows who to eat' appear?

Vladimir Putin: I believe that each Address to the country must be different, otherwise it is not an Address, but simply a repetition of previous ideas. The meaning of each Address consisted in the fact that each of them was devoted to one or two basic themes which could act as priority issues in quite a long-term perspective.

For this reason, if the theme is a considerable large-scale one, and important for the country, then of course as a rule such problems are not solved in a year, in two years or even in three or five years. For this reason they are all designed with approximately a ten-year time frame in mind.

In the addresses of the previous years I paid more attention to the economy and concentrated my attention on various aspects of social policy. Now, in view of our growing opportunities, I considered it necessary to concentrate on basic threats that, as I see it, the country must, first of all, identify precisely – each citizen must be aware of these threats – and, secondly, articulate a vision for how they can be overcome.

Regarding the economy, I first drew attention to the dangers inherent in the technological gap between our economy and the leading economies of the world. This is because the economy is at the basis of everything, both defense and social policy, and in general is the basis for the existence of the Russian state.

In the part devoted to the economy I talked about exactly this. With respect to social issues, there are a great many problems. We know that in our history, as a rule, these problems have unfortunately always been resolved by leftover financing. But it seems to me that I found the issue that really unites the whole nation.

Everyone understands the threat that demographic decline poses for this country. Russia has a huge territory, it is the biggest country in the world, and if it continues in the same way than there will simply be nobody left to protect it. And it is far from being a territorial problem, it has to do with people. What kind of a country are we if we cannot ensure our own reproduction? Clearly, this is a problem in all postindustrial countries, but we are in both postindustrial and transition periods at the same time. We were faced with economic, political, moral and all other kinds of upheavals you can imagine. All of this resulted in very serious demographic losses.

And finally, in previous years we talked a lot about the terrorist threat and paid a great deal of attention to the law enforcement agencies. This was justified because these were the threats we really had to struggle with at that point.

One could say that as of 1999, when I became Prime Minister and then President, this was the most pressing issue. It was impossible to think about large-scale projects and how to accomplish them when our country was going to pieces and, as a matter of fact, there was a civil war. It was natural that I had to talk about this.

But today, I want to draw attention to the fact – I don't know whether you've noticed or not – that for the first time in many years our army is not at war anywhere. For example, all airborne forces are on Russian territory and are working on combat training. Even the 42-nd division posted in the Chechen Republic has already prepared shooting ranges, military training centres and is working on daily combat training just like the other Defense Ministry divisions on the territory of the Russian Federation.

True, from time to time we are called on to show that we have an army there but in general in the Caucasus and in the Chechen Republic we are now managing with the Interior Ministry internal forces of the Russian Federation. Employees of the Chechen Interior Ministry have taken on a significant part of the work.

Therefore we have both the time and the opportunity to talk about the strategic development of our armed forces. But it is also a tradition that every Address defines certain aspects of our foreign policy. And this is the reason why the themes that I just mentioned are the ones you heard in the message.

Now, as to how work on this Address proceeded. At the beginning I simply told the head of the Presidential Executive Office what I wanted to see in the Address and received a preliminary version. Colleagues will not be offended by me saying that I read it and felt that it didn't convey what I wanted to say.

I invited the head of the Presidential Executive Office to come and see me and dictated the plan to him — what should be first, second, third out of what I think were eight points. Then I invited several ministers, first of all from the economic sphere — the Finance Minister, the Economic Development and Trade Minister — talked with them, and got ideas and proposals regarding the development of the economy and investment sector. And then I did the exact same thing with the ministers from the social sphere. I asked them to report to me on implementing the directives, linked with overcoming the demographic problem. The Ministry also put forward its ideas. I did the same for both the Foreign Ministry and the Defense Ministry.

Because the biggest financial problems concern demographic issues I therefore had to bring the economic and social ministers together several times. After that I charged the first Deputy Prime Minister Dmitrii Anatolevich Medvedev to coordinate certain aspects between the departments. He gathered them together several times and then declared that certain agreements were impossible to reach. And I was forced to bring them and members of the Presidential Executive Office and lawyers together several more times. At this meeting the final decisions on numbers and dates were taken. And I was obliged to make these decisions. And afterwards it was only necessary to verbalize these agreements, to put them on paper.

When this was done, together with the head of the Presidential Executive Office we started to work on the text in detail. This is also creative work but less substantial. Nevertheless, it is also important because it was necessary to ensure that one issue logically follows from the other. So that during the hour people did not fall asleep and listened carefully.

Regarding the evocative expressions you mentioned, they were actually thought up while I delivered the Address.

Sergey Brilev: Vladimir Vladimirovich, the Address is structured in a very logical way. One thing flows from another. My question is quite a pragmatic one, because I have a programme to present tonight. For you, what is the most important theme in this Address? And the second question concerns the moment when you are in front of the podium addressing the Federal Assembly — they are all there in front of you and this year even the Public Chamber joined in. When looking at the audience, do you feel it is varied enough? This is especially topical since the 2007 elections are slowly approaching. Next year, do you see the parliament as working in approximately the same way, or do you think that things could be a bit different?

Vladimir Putin: It must be the way the people want it to be. If certain political forces declare political programmes that the electorate feels are acceptable and attractive, then they must be in parliament and defend their ideas that should reflect those they put forward during the election campaign. To bring this to people, to show them that they are right, why they are right, and how they aim to achieve their goals.

You know that we have a very short history of developing direct democracy. During the first stage — we are both well aware of this and it is unpleasant to talk it — votes were bought with sausages, with promises, and then people paid dearly for this.

And why did this happen? Because the ordinary citizen had no experience with direct democracy. We don't need to blame anyone for this, except those who did it consciously and understood what they did. For this reason we were faced with situations like those in the Far East, I mentioned it earlier, when a couple of cities froze and local leaders – elected leaders – simply ran away. And when one of the cabinet ministers arrived, he met with the Governor's representative who was responsible for this issue and said: 'we must go there together'. He answered 'I am not going'. 'Why?' 'They will beat us up'.

This speaks volumes about the quality of the people who sometimes get elected. But progressively, as people realize that their quality of life depends on the quality of their vote, then I believe that the situation will change. But it is everyone's task, including yours, to say this clearly and to show it objectively.

I hope that the next parliament will be effective, and will contain people who will not only be able to generate ideas but also to implement them from beginning to end, to their logical conclusion.

Mikhail Antonov: Vladimir Vladimirovich, in your Address, you mentioned the problem of corruption. But this was not the Address' central theme. How do you evalute the present state of corruption in Russia and how effective is the government's struggle against this problem?

Vladimir Putin: If the government was effective at combatting this problem, then I wouldn't have spoken about it in the Address.

Unfortunately, we must realize that the government is not fighting it effectively. I said this straight out. It seems to me that I emphasized that this is not only a Russian problem. Many countries in the world have faced this problem at crucial moments. And now there are many such countries in the world.

There are several elements with respect to corruption. Firstly, there is undoubtedly the need to create a strong civil society, but also to ensure that the state can coexist with such a society.We need the civil society to be itself responsible and understand what kind of country we live in today. How our country lives and which internal laws govern its functioning.

We cannot simply copy other territories yet we must introduce basic principles calmly, delicately, but persistently. The state must strengthen itself. I have already spoken about this many times and for some reason it is often understood as strengthening bureaucracy. When talking about strengthening the state I am first of all thinking about providing the government with the ability to make just laws and to be able to implement them.

In the end, all this should lead to positive results. But it is possible that corruption, like certain other social problems, is one of those things that cannot be defeated decisively. In any case, corruption occurs in all countries, including in Europe and in the United States.

Just now a CIA employee was exposed. And, if I am not mistaken, a congressman is in there with him.

Look at the Spanish example in Marbella – they put them all in jail. And in South Korea? The head of the largest company was taken away in handcuffs. This is something that, unfortunately, affects everyone and probably always has. But this does not mean that we must not fight corruption. There can be different levels of corruption. I believe that in Russia today, the level of corruption is inadmissibly high.

Andrei Kolesnikov: Are yesterday's large scale dismissals in the law enforcement agencies the result of ideas contained in your Address or is it just a coincidence? What will happen to customs departments in the future and, in your opinion, will this affair in customs lead to the dismissal of businessmen? We are talking about quite evident corruption…

Vladimir Putin: Of course it was the result of a thorough investigation by the law enforcement agencies, first and foremost by the Federal Security Service as well as customs' own internal security service. Of course, this was not done to coincide with the Address.

When I prepared the Address, I knew that investigations were being carried out. Obviously, no one did this specially for the Address. The investigations arrived at their natural conclusion, the one that we both witnessed. But work remains to be done, and not only with respect to customs.

Oleg Dobrodeev: Another aspect of Sergei's question was which one of the important themes that you mentioned in the Address is the most important one for you?

Vladimir Putin: The economy. I already talked about this. In today's world the nation's power is first and foremost defined by its economic strength. And the state of society, social policy, and defense all derive from the economy. They are all derivatives. If there is no possibility or, to put it more simply, if there is no money… What can you do? You can't go to the store, you can't buy anything, neither a gun, nor a missile, nor medicine. For this reason the economy is at the basis of everything. At the beginning it was Karl Mark and then Freud and others…

Olga Solomonova: In the United States the presidential elections will take place later than in Russia and George W. Bush has already chosen his successor.

Vladimir Putin: Really? I don't know about that. Did he tell you about it?

Olga Solomonova: He is proposing his brother.

Vladimir Putin: Nepotism – what else can we expect from them? (laughter)

Olga Solomonova: And how is this process developing in Russia?

Vladimir Putin: Which one, with brothers?

Olga Solomonova: With the successor.

Vladimir Putin: I had two brothers in my family but unfortunately I never saw them. One died before the war, another during the Leningrad blockade. For that reason I cannot propose any brothers but it would be a lie to conceal the fact that I have always thought about this. I have thought about it since 1999, or at least since 2000, right after the presidential elections. And I am thinking about it now.

I have certain ideas about how it would be possible to manage the country during that period. So as not to destabilize it. To not frighten people. To not frighten away business. You know that in the business world some people like certain things while others don't. And there are those who like what happened with one well-known company. There are those who intentionally worked to stir it up. But in general both business and ordinary citizens value the state of affairs today. A quiet, balanced, stable situation.

Both businessmen and ordinary citizens are thinking about what will happen after 2008. All are thinking about this. I understand this. And I don't consider that I have the right to say 'ok guys, I've done my job, see you later. And then do as you wish, scrape by'. Of course this will not happen.

I will fulfill my duty, right until the very last minute of my mandate as President, in a responsible way. This means that I will have to think about how the situation will develop, but the final decision regarding this or that person, in this or any other election can only be made by the citizens of the Russian Federation. In general as I see it if we start to impose someone there could be a backlash against them. But I consider that I have the right to express my point of view and my opinion. On one candidate or another. I too am a citizen of the Russian Federation and have a right to my opinion. And I will express it.

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