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President of Russia Dmitry Medvedev: Comrade generals and admirals! Comrade officers!

Today the board is meeting in an extended format. Along with representatives of the Ministry of Defence, there are representatives of law enforcement agencies and leaders of the legislative and executive bodies.

A modern, well-trained army equipped with modern weapons is the key to our defence. It safeguards us against any potential threats or attempts to put pressure on our country, and is of course a fundamental condition for the successful development of Russia, the growth of our national economy and the welfare of our citizens. In light of the factors just mentioned, I would like to analyse the results of military activity over the past year and naturally I want to discuss priorities for the future.

2008 was a difficult year for our Armed Forces. The events in South Ossetia were a major test. The Russian army and Russian peacekeepers showed that they can defend the national interests of our country and protect people's lives.

I should also note that in the past year the Ministry of Defence has done a lot to strengthen the army and navy. More combat and operational training for our troops is now available. A number of large-scale exercises took place, during which new challenges featured prominently, along with capabilities of combat formations and units. Some of these exercises were unprecedented in modern history in terms of the number of troops involved.

The professional component of the Armed Forces has been strengthened and the length of service for conscripts has been reduced to one year.

Other indicators show that progress in general has been good. Incidentally I once again saw evidence of this at a meeting on 19 February with the heads of one of the largest military districts, the Siberian Military District.

Any analysis of the military and political situation in the world shows that in a number of regions serious potential for conflict remains. There is always the risk of local crises and international terrorism. Attempts to expand the North Atlantic Treaty Organisation on the borders of our country continue. All this requires a qualitative modernisation of our Armed Forces to give them a new, forward-looking perspective. Despite the current financial difficulties, we can make all the necessary provisions.

In this connection, I will focus on a number of priorities.

The first challenge is improving the combat readiness of our troops, not just regular improvement but a quantum leap, most importantly in our strategic nuclear forces. They must be unequivocally ready to meet all the challenges necessary to ensure the military security of our nation. What is also on the agenda is the transfer of all combat units and formations to the status of permanent readiness. I want to stress that this is a key component of the new model or new image of the Armed Forces.

The second challenge is optimising the structure and the headcount of the army. I want especially to stress that military planning must be based on the current situation and the nature of potential threats, and that long-term defence plans should be based on the Russia’s National Security Development Strategy through to 2020, which will soon be approved by the Security Council.

The third and most important challenge is to equip our troops with advanced weapons. Important sums have been spent on the development and procurement of these weapons, and despite the current financial problems the amounts spent are almost identical to those included in the earlier projected figures. In the past year we have transformed a whole range of combat units and formations by providing them with modern equipment, and in 2011 we will begin the large-scale rearmament of the army and navy.

Fourth, we need further improvement in military education: the network of military educational institutions must be brought into line with the real demand for officers. Military institutions as well as civil institutions should of course be actively involved in modernising the system of higher education in our country and in the process of integrating education, science and industry in order to prepare highly qualified staff that are capable of creating new technologies.

Another objective or absolute top priority of our work is resolving the social problems of servicemen. In recent years, the state has paid a great deal of attention to enhancing their social status. Since 2000, the funds set aside for this have increased more than tenfold. During the same period the pensions of those who retire from the military have significantly increased. We have worked continuously on one of the most critical problems that exist in the army, namely the housing problem. In 2008 alone the Ministry of Defence has made more than 22.5 thousand apartments available as permanent housing for troops; in 2009 the Ministry of Defence is planning to purchase more than 40 thousand apartments.

Since October 2008 the amount of monetary compensation for renting accommodation has significantly increased. Nevertheless, it does not yet fully cover the costs of military personnel who rent housing. This topic should be addressed.

There is now a funded mortgage system for servicemen. The indexation of allowance will be continued if economic growth permits, and we will build new housing at the rates that I just mentioned and improve our military towns.

And, finally, we need to show more responsibility and pay more attention to the problems of social adaptation for officers who retire from the Armed Forces and to the issues of their retraining and ongoing employment. In addressing this issue The Ministry of Defence should work closely with other agencies and with representatives of the business community and regional authorities.

In conclusion, I would like to stress once again that a lot will have to be done in order to give our Armed Forces a new image. For it to succeed we need the commanders at every level to be highly competent; equally necessary are the co-ordination of our joint actions and – of course most importantly – public support for reforms in the army. In this regard, it is necessary to explain more actively the purpose and meaning of the transformations that are currently underway. The leaders of the Armed Forces and representatives of federal and regional authorities should all be involved in this work.

Let me thank you for your service and wish you all sorts of new successes.

***

At the end of the first part of the Defence Ministry board I have literally just a couple of things to say.

Of course, last year was really very difficult for our country, and this year has not been easy for obvious economic reasons.

Returning to the problems that arose in the Caucasus: the conflict in South Ossetia is clearly a reason for the sort of serious discussion and analysis that has already been conducted and has led to certain conclusions.

In my opening remarks I said that our Armed Forces and our peacekeepers have shown themselves in the best light. This is true and there should be no doubts whatever on this score. But of course this conflict also revealed our weaknesses. They are well known to everyone in the room. I won’t go on and on about them, but obviously the problems associated with certain types of weapons and with communications during the relevant operations are well known and require an immediate response.

I said that many kinds of exercises have been held for the first time in recent years and some of them for the first time in the history of the Russian Armed Forces. That said, we have to recognise that we have to perform more such exercises. I think that we will continue to expand whatever opportunities we have in this area, and of course conduct them effectively, because only during such exercises can you hone your combat skills, and we must not begrudge money for this.

Another ongoing concern about which the Minister of Defence spoke is the creation of the Collective Rapid Reaction Force of the CSTO [The Collective Security Treaty Organisation]. As you know, this decision was made by us and other CSTO member states. This must be an up-to-date force, equipped with the latest models of military equipment, with their own uniforms. In general, it must be made up of units that we can use to deal with our most serious problems, for example, a terrorist attack, or to defend against other possible military threats. This is where we can test some of the latest technology.

Concerning the procurement of weapons, I spoke about this at the outset and the Minister of Defence has just done so as well. In fact the pace of these acquisitions has recently increased. Yet it must be admitted that we need to acquire more for the Armed Forces, in both quantitative and qualitative terms.

Another subject that I have already touched on is that we have to stop repairing equipment and should start buying it new. While in a previous era, when we had lesser capabilities and other problems, repairing equipment was more or less explicable, nowadays during a crisis, that is at a time when part of our military production is shut down, when enterprises in our defence industry aren’t working to full capacity, repairing equipment is unacceptable. We need to buy new equipment.

Another subject that was mentioned and I would particularly like you to focus on is of course the transition of units to the state of permanent combat readiness. This is an important and very difficult task that has never been addressed by our Armed Forces. Of course it will take some time and a very important concentration of efforts. It will require everyone’s efforts, not only those of the Ministry of Defence, but also those of the civil authorities who are required to carry out this task according to the decision made.

Concerning social questions: in fact, this is one of our most important priorities. And everything that has been done recently is no doubt is a step in the right direction, but it is still not enough. We must confront this challenge and provide permanent housing by 2010 and service accomodation by 2012. And even faced with a financial crisis, we can meet this challenge.

Dear Comrades! The challenges faced by our Armed Forces are greater than they have ever been. And at the same time we must acknowledge that we have everything we need to meet them. Let me repeat: despite the difficult financial circumstances which our country and other nations currently face, in the whole modern history of Russia we have never had such favourable conditions for creating modern and efficient Armed Forces.

I would like to thank you again and to wish you success in this task. We will work hard together.