OREANDA-NEWS. January 27, 2011.  The President spoke about his views of the situation in Russia and the world, the main principles of Russia’s modernisation strategy, and presented a number of Russia’s specific proposals and initiatives.

Dmitry Medvedev began his speech by addressing the tragedy that has shaken Russian society: the terrorist attack at Domodedovo airport. Noting that globalisation has made the world more interdependent, Mr Medvedev highlighted the need to create a global security system that is equal for all states, emphasising the necessity to do everything for sustainable, safe and fair global development.

According to the President, the world must truly unite in order to fight terrorism and eradicate its socioeconomic causes – poverty, unemployment, illiteracy, orphanhood, and many others.

Mr Medvedev affirmed that the crisis has had a sobering effect on everyone, but the economy has not been the only source of lessons learned. Noting the recent environmental disasters in various nations, the President of Russia stressed the necessity of completing the ‘long-standing’ climate talks and creating a common system for environmental monitoring, prevention of and responding to emergency situations.

According to Dmitry Medvedev, today the world needs ideas that can change it for the better; in this regard, it would be beneficial to discuss Russia’s proposals for a new European Security agreement in Davos.

International relations and regulation principles are increasingly lagging behind. In order to build a new world, it is necessary to be guided by several well-known principles, Mr Medvedev said.

First of all, problems need to be addressed through a strategic, long-term approach.

Second, we must be realistic and ready to live within our means. Today’s reality in various nations - sovereign debt crises, budget deficits, reluctance to cut spending – is fraught with new economic and political crises.

The third principle concerns global partnership and its proper organisation. Dmitry Medvedev stressed the necessity for the G20 to work effectively and for developing new leadership alliances, particularly within BRIC format, which will soon be joined by South Africa. The President suggested including BRIC currencies in the IMF’s basket of main currencies known as the special drawing rights (SDR) system.

The fourth principle is the diversification of the world’s various economic and political models that allow for adapting to future challenges.

Mr Medvedev emphasised that Russia’s modernisation strategy fully corresponds with these principles and offers new opportunities for successfully doing business in the country. The President specified the main steps being taken by Russia as regards privatisation, investment, financial sector, energy sector, creation of new markets and creation of a common economic space with the European Union, as well as the creation of a common economic space with Belarus and Kazakhstan.

Furthermore, new opportunities are being created in Russia for innovation and venture capital financing; the mechanisms for technology transfer are being used, and there is a programme for expanding broadband Internet access along with a state project for integrating banking and public services and developing electronic payments. In addition, Russia is training its own specialists and seeking to attract the best foreign specialists.

The President also spoke about the implementation of major infrastructure projects in Russia, including major international sporting events.

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PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Mr Schwab, ladies and gentlemen,

A terrorist attack was committed at Moscow Domodedovo International Airport the day before yesterday, killing dozens of innocent people. Citizens of different countries died at the hands of terrorists: Russia, the United Kingdom, Tajikistan, Ukraine, Germany, Austria, Kyrgyzstan and Uzbekistan. Over a hundred people sustained injuries and are now in hospitals.

This tragedy was a real shock for Russian society, despite the fact that our country had suffered similar ordeals in the past. It caused an outrage throughout the civilised world. I have received numerous letters, telegrams and telephone calls from leaders of many states and heads of international organisations expressing their condolences and solidarity. I am grateful for your sympathy and the words that I have just heard from you and from other forum participants. We mourn for the dead together.

The pain from the loss of lives will remain in our hearts for a long time, but the incident only strengthened our common resolve and determination to find effective safeguards against international terror, and I think it is extremely important. Those who committed this atrocity, directing their attack against the citizens of different countries, expected that this would bring Russia to its knees and force us to assume a defensive position; they believed that the Russian President would not come to this forum. That is how they chose the time and place for perpetrating the attack. They miscalculated. Russia is aware of its place in the world, its commitments to its citizens and to the international community and will fulfil them, which is why I speak from this podium on this day.

Terrorism negates the most important right: the right to life. Whatever its ideological foundations, it defies any and all rights and freedoms, breeds fear and hatred and hampers efforts to reform and improve our world. The tragedy is that terrorist attacks fundamentally change the course of normal life, our habitual way of life, and at times force us to take very tough decisions that radically alter the thinking not only of the terror’s victims, but also of all the people on the planet.

Unfortunately, no country in the world is safe from terror today. The reality is that a terrorist attack, similar to the one that shook Russia a few days ago, and not for the first time, unfortunately, can occur at any time anywhere in the world. No country today is secure against terrorism. There are no universal methods to fight this scourge but one thing is certain: our success in countering this common threat depends on our solidarity and concerted efforts, especially at a time when globalisation has made our world much more dependent and interdependent than it was some time ago, and we need to boost our efforts to jointly fight terrorism. We must do everything possible to influence if not the ideology, then the socioeconomic roots of terrorism: poverty, unemployment, illiteracy, and orphanhood, and to ensure that global development becomes stable, secure and fair. Once again, I sincerely thank you for your sympathy.

This forum is taking place at a time when many people are talking about the end of the global financial crisis. At the same time it is also clear that things are not that simple. A period of superfast development gave rise to euphoria but the crisis sobered everyone up. We have dealt with a significant part of its symptoms, but not all of them, and until we find a new growth model, economic growth will be slower than we would like.

At the same time, it is not only the economy that has taught us important lessons in recent years. Modern civilisation is technologically very advanced, at least if compared with the world as it was just one or two hundred years ago. Yet a single natural anomaly or technological error can put entire regions on the brink of ecological disaster and separate continents from each other, as it was in the past centuries. The volcanic eruption in Iceland, a major accident on an oil platform in the Gulf of Mexico, the heatwave in Russia last summer, devastating floods and snowstorms in various parts of the world – it all makes one think about the humanity’s fragility.

I believe that any delays in this sphere can be dangerous. Our objective is not just to complete the protracted climate negotiations, though this is imperative, but we must also create a common system for monitoring the environment and hazardous sites, and a general warning and disaster management system. Russia has put forward such an initiative, and I hope that our partners will also agree that these measures are long overdue.

Today there is an urgent need for new ideas that can change the world for the better, ideas that in the future will set new requirements for policymaking and will become standards for governments, the business community, social development and relations between states.

If we talk about security, some time ago Russia put forward a number of proposals regarding a new European security treaty. I think that such issues can be discussed at various venues, and it would also be useful here, at the World Economic Forum in Davos.

Today politicians’ actions, international relations and the regulation principles are increasingly lagging behind progress. At the same time, some people, some politicians continue to believe in the phantoms of the Cold War and get carried away by their primitive ambitions of power. But it is precisely in this period that a considerable part of the global community, almost one billion people – just think about this figure – use social networks for the first time in the thousand-year history of humankind; they are communicating directly with each other while remaining on various continents. That is amazing.

The modern world is becoming more flat, as they say, erasing formal borders and barriers. The World Wide Web has fostered the creation of communities of people who live in different countries but are united by a shared goal or idea, and no national government can claim to have a strong impact on such communities. Perhaps that is for the better. The business community has experienced similar changes.

However, these processes also have a dangerous side: they can become a very important tool for extremists who incite ethnic and religious hatred, for drug traffickers, arms dealers and terrorists. These problems are also increasing, and it is impossible to ignore them.

At the same time this universal connectedness must become a powerful driver of economic growth, and any attempts to sever these ties, such as restrictions on Internet freedom or the spread of innovations, will lead the world to stagnation and I think everybody realises that today. Russia will not support initiatives that may jeopardise Internet freedom, a freedom that is founded on basic values and the law.

Colleagues,

Our task is to use every opportunity to transform our new world into a world that is more just for the vast majority of citizens, a world in which success is determined by talent and hard work rather than family background, a world where billions of people will be able to communicate directly with each other, a world where people are not afraid of the government, and international relations are free from double standards and hypocrisy, a world where it will be easier and more efficient to work together, to work jointly. Especially since a new generation of leaders has come to power in many countries, politicians whose views were formed after the Cold War. We can discuss and realise our dreams together, we are ready for that – and when I say “we” I mean Russia. All this should compel us to move towards a greater level of transparency and coordination. I believe that the positive trends in relations between Russia and the United States, as just noted by Mr Schwab, are a good example of new principles and approaches in international politics.

Incidentally, I would like to remind you that yesterday our Parliament finally ratified the new START Treaty. In order to build such a world, we must rely on a number of well-known principles, some of which we sometimes forget. There are several such principles and I would like to list them.

First, it is a strategic long-term approach to addressing problems. Simple and often populist solutions in 90 cases out of 100 are wrong and sometimes they prove to be the worst out of the possible options. A vivid case in point is a trend to resolve all economic problems through nationalisation, including the nationalisation of financial institutions.

During the financial crisis, many states considered that course of action and many of them chose that option, including states with highly developed liberal economy. We don’t have a sufficiently developed economy in Russia but we did not resort to that option, and I believe we were right in doing that. I am confident that in most cases it is possible to find solutions to crises through the efforts of the private sector, and in the long-term perspective, this is the most effective way of dealing with things.

Second, it is vital to be realistic and be prepared to live within one’s means. Many bubbles burst during the crisis, not just financial bubbles, but also bubbles of illusions and complacency. I think we all understand that none of us are insured against the emergence of new bubbles. The right to risk is part of a free economy, but that right should be balanced by relevant responsibility. The right to excessive risk is something that businesses should have, as well as individuals and scientists, within reasonable limits, of course, but states and the entire international community cannot have the right to excessive risk.

The present-day reality in many developed countries is such that they face the problems of sovereign debt, budget deficits and, despite all of that, the reluctance to cut expenditures. This is fraught with new global economic and political crises. Incidentally, yesterday’s State of the Nation Address by the President of the United States was very indicative in this respect: it spoke about a five-year freeze on budget expenditures. This is a serious measure.

Third comes global partnership and the right way to organise it, no matter how difficult it is to renounce the practice of individual or narrow group interests, it is something that needs to be done. The establishment of the G20, I am quite frank in saying that, is a major, huge step forward. On the one hand, the greater the number of countries sitting around the table, the more difficult it is to reach consensus, the more time is requires, but on the other hand, the decisions adopted in the end are far more successful. I hope that the G20 has demonstrated that.

We are prepared to use all the instruments at our disposal but the efficiency of work in the G20 format must be enhanced. It is vital to proceed from general discussions, even if they are fascinating, to the implementation of specific tasks. There are many such tasks ahead of us and we have already achieved many things, for example, we have determined the ways to develop world financial institutions, such as the International Monetary Fund and the World Bank. That is good, but still there are many things we have not done yet.

There is one subject I would like to mention now: I am confident that the old principles of intellectual property regulation are not working anymore, particularly when it comes to the Internet. That is fraught with the collapse of the entire intellectual property rights system and therefore I believe this issue should be included in the agenda for the next G20 summit. We should offer new solutions to the international community, solutions that should be formulated as international conventions. Russia will advance its proposals.

At the same time, we should develop new alliances of leaders. It is important that the BRIC group, as modelled by economists some time ago, has acquired huge credibility and the status of a truly efficient organisation. At least we intend to expand our efforts in that format. Starting this year, South Africa is joining this group, and it will become BRICS. These are countries that stand every chance to become the leaders of global development and to shoulder responsibility for that process. I believe that one of such ideas could be implemented very shortly: to include the currencies of BRICS countries in the IMF SDR basket.