"XXIst Century Russia - the Time of Profound Change"

On February 23rd starts the official visit to Russia of Mr. Abdullah Gül, Deputy Prime Minister and Minister of Foreign Affairs of Turkey. Moscow attaches great importance to the forthcoming talks, since we see Turkey as our natural partner, with whom we share the bonds of good-neighbourliness, have common interests both in the Black Sea region and Eurasia, and with whom we are involved in the process of multidimensional cooperation that has lately been developing at a very high rate. We are fully aware that the stability of this vast region largely depends on the level of the mutual trust and interaction between Russia and Turkey, the two major Eurasian countries.

On the eve of this remarkable event, I'd like to draw a rough image of present-day Russia. Nowadays, under the current conditions of globalisation, certain processes that used to last for decades, now may well be over within years, or even months. Today's Russia, as well as Turkey, has little to do with the stereotypes dating back to the 1990s.

The Russian Federation, within a historically short period, has managed to transform itself into a completely different country, at the same time preserving its historical and cultural roots. Its political system, its model of economic development and social structure have undergone crucial changes.

As Mr. Vladimir Putin, President of the Russian Federation, pointed out, by the year 2000 Russia found itself amidst an extremely difficult situation. The nation faced a real threat of disintegration of its legal and economic entity. The painful aftermath of the radical shattering of the old state system was felt everywhere. This, in turn, affected the way the new legislative system was formed in the 1990s. Regional regulations contradicted the federal law, thus encouraging separatist trends. As a result, all this constituted a serious challenge to Russia's territorial integrity. To make things even worse, there were grave consequences of the 1998 economic crisis, which had put under question the trustworthiness of the country itself. More than 40 million people had to live below the poverty line. The negative experience of the 1990s' economic reforms, painful for most Russians, also contributed to the pessimistic view.

Meanwhile, the last four years have demonstrated to the whole world that new Russia is capable of tackling its tasks successfully. It didn't take us too long to overturn the negative trends and find the optimal way of solving the whole complex of the major social, economic and political problems.

First of all, it is necessary to point out that the fundamental task of preserving the economic and legal integrity of the nation is, on the current stage, done. The large-scale reforms in the "centre versus regions versus local self-government institutions" relations so far have strengthened the power axis and provided the legal fixation for the way the power and authority, as well as property and the finance sources, are distributed between the various power levels. Prerequisites for the territorial disintegration of Russia have thus been eliminated. The constitutional referendum followed by the presidential elections in Chechnya in 2003 have initiated the gradual process of its return into the constitutional framework of the Russian Federation. Along with the consolidation of the positive trends underway in the republic, the process of handing the extended power over to the legitimate local authorities will also continue.

Of course, there is a lot that has yet to be done for the improvement of the Russian democratic system. But nowhere in the world such a process has ever been smooth and fast. The stabilisation of the internal situation and the measures aimed at consolidating the country's democratic statehood and federalism will obviously contribute to that.

As for the Russian economy, it has obviously shifted towards the market and sustainable economic growth.

Owing to the structural economic reforms, Russia's gross domestic product (GDP) throughout the last four years (from 2000 to 2003) has grown almost by one third (29.5%). For 2003 only, the GDP increase is expected to be by no less than 7%. The average annual growth rate for the last four years has been 6.7%, which is two times higher than that of the developed countries, and by 1.5 to 2% exceeds that for the developing and transitional economies. The profound taxation reform and the gradual restoration of the financial system also contributed to the positive changes. Russia has become one of the world's most financially stable countries. For the fourth year in a row, it has kept its average annual budget surplus at the rate of 1.9% of the GDP. As of January 1st, 2004, Russia's national debt amounted to 33% of its GDP, which is two times lower than it is required for the EU membership. In 2003, it was slightly more than 26% (US$119.1 billion), compared to almost 90% (US$158.4 billion) in 1999. The balance of Russia's foreign trade is positive. For the first time in the last 50 years, Russia has begun exporting its grain, instead of importing it; the national gold and monetary reserves rose from US$12.4 up to 84 billion as of February 1st, 2004, which also acts as an additional safety factor for the national economy.

The sustainable high rates of the economic growth, political and social stability, - all these factors have had a positive influence over Russia's investment attractiveness. The fact that our country has been recently promoted in the Moody's Agency ratings is a clear recognition of its progress. Not only does it characterise Russia as a reliable borrower, but also provides investors with the necessary clues, acknowledging the positive economic changes in the economy. The direct foreign investments are estimated to total up to US$6 billion in 2003, with the average for the period of 2000 to 2003 being US$4.7 billion.

The perceptible improvement in the economic situation has had its reflection on the developments in the social sphere. Within the same four years, the real per capita income has risen by 53.2%, while the number of those living below the poverty line dropped by 10 million; the unemployment rate among the economically active population decreased from 12.6% in 1999 to 8.6%. Meanwhile, the inflation has dropped from the average of 36.5% in 1999 to just 12% last year.

An important thing is that we so far have achieved the necessary macro-economic stability of the country. Russia has restored its position as a reliable and predictable partner.

Of course, we are far from overestimating these achievements. The Russian leaders are well aware of the necessity to continue the deep structural economic reforms. We still have a vast number of social problems to solve. There is still a huge income gap between the rich and the poor. But still, the tendency for the better in our country's economic, political and social climate is quite obvious.

As it is generally known, the main objective which was put forward by President Putin is to double Russia's GDP within the coming ten years. This task seems difficult but possible to achieve, chiefly because of the support Mr. Putin's social and economic course has among the people. The results of the last September 7th elections to the State Duma (the lower chamber of the Russian Parliament) also speak in favour of that.

The increasing confidence among the society towards the President's foreign policy seems largely due to the fact that the nation's leadership try their best to put forward the tasks that are clear to the people and meet their essential needs, and are consistent in implementing them. It is quite remarkable that Russia is currently on such a stage where active foreign policy becomes one of the factors stabilising its internal situation.

In the last few years, the vast social consent concerning Russia's national interests and priorities on the international arena has been reached. Among these, the essential priority is to create possibly the most favourable external conditions for the country to ensure its firm security and sustainable social and economic development. Building up a consistent and predictable foreign policy, as well as developing balanced and mutually beneficial relations with the nations all over the world is indeed in Russia's long-term national interests.

The stable rate of economic growth and the further strengthening of the internal political stability have had a positive impact on Russia's international position. The ability of the state to conduct a more dynamic foreign policy, to come up with new political initiatives, to exert more influence upon world issues in accordance with the Russian national interests, to enlarge the circle of our partners and supporters world-wide, has been considerably expanded.

The concept of the Russian foreign policy, approved by the President, is essentially that of defending firmly and consistently the country's national interests from the position of realism and pragmatism in the face of increasing new threats and instability.

A remarkable achievement of the Russian policy is the consolidation of the international community's constructive approaches towards the establishment of a new democratic and just world order. The international anti-terrorist coalition which was formed following the tragic events of September 11th, 2001, with Russia being one of its active participants, could well be a prototype for that. Moscow has been consistently promoting the central role of the United Nations, the primacy of the international law, and the solution of key world problems on the basis of multilateral cooperation to be the core of the future system of international relations.

Russia's balanced foreign policy has been readily accepted by the international community. The firmness and consistency that Russia has been demonstrating while defending these principles, which are also shared by most democratic states, together with its non-confrontation political line, have helped us to prevent the further escalation of the Iraqi crisis and to save the antiterrorist coalition from collapse.

Russia actively contributed to the adoption of the UN Security Council resolutions No.'s 1483 and 1511, which made it possible to find a way to defuse the acute crisis in this country.

Following the principles of multilaterality, Russia has been in close cooperation with various international institutions, which could become the elements of a new emerging system of international relations for the XXIst century. This includes the G8, which often generates initiatives of fundamental importance. As you know, Russia became a full member of this informal club of the most developed countries at the 2002 summit in Cananaskis.

Among the facilitating factors contributing to the successful solution of complex international issues, there is the new multi-vectoral nature of the Russian foreign policy, which has recently taken its final shape. The most important characteristic of it is that its different geographic directions and priorities naturally compliment one another. Never have there been any clashes between its European, American or Asian vectors; it has no place for "fighting for the spheres of influence", for "exploiting the contradictions" or "driving wedges" between anybody, or for any other such instrument of the confrontation era. Nor will it ever be the case. Each of its directions have been subject to a single imperative, which are Russia's national interests, the strengthening of international security and world stability.

Throughout all these years, the creation of the sphere of partnership and cooperation along Russia's borders has remained one of its policy's central priorities. In this context, the recent transition to the new process between the CIS countries, under which various levels and different speed of mutual integration is possible, gains primary importance. The Commonwealth has proved itself to be a useful mechanism for the multilateral interaction between the former Soviet republics, with its activities becoming more substantial and concentrated over the directions where the maximum outcome is possible. In October 2000, the founding Agreement of the Eurasian Economic Community was signed; the Agreement on the Union between Russia and Belarus entered into force the same year; and the Agreement on the economic integration between Russia, Ukraine, Belarus and Kazakhstan was concluded in September 2003. Throughout all these years, the military and political cooperation between the member states of the Collective Security Treaty has been underway, resulting in the creation of a new regional association also in 2003.

In 2001, the two permanent members of the UN Security Council, Russia and China, together with the key Central Asian states, all participated in the creation of the Shanghai Organisation of Cooperation, which significance cannot be underestimated within the context of the emerging area of good-neighbourliness. By now, this organisation has become a well-developed regional structure that is capable of solving crucial political and economic issues, as well as problems related to the common threats and challenges.

Our relations with the United States have also developed significantly. Considering their global strategic importance, they too remain our top priority. We have moved forward a great deal in our natural relations with the European Union, since Russia too is a part of Europe. These contacts are of various natures: political, economic, cultural, etc. Russia has been active in the shaping of the new architecture of Euro-Atlantic security. Its policy here is essentially that all organisations acting in this sphere on the continent (i.e. the OSCE, the EU, NATO, the Council of Europe, etc.), should provide equal security to all indiscriminately, thus contributing to the strengthening of mutual trust, to the solution of conflicts and facilitate the peacekeeping efforts. The breakthrough in our relations with NATO has been made by creating the Russia-NATO Council, which is scheduled to meet within the forthcoming June NATO summit in Istanbul.

One shouldn't forget that Russia is also an Asian country. We therefore seek to develop our contacts with the leading Asian nations and associations. The level of our relations with such countries as China, India or Japan, had never been as high as it is now.

In its efforts towards creating a new system of partnership along its borders, the Russian diplomacy also takes into consideration the situation on the Middle East. Its participation in the international quartet for the settlement in the Middle East is the evidence of Russia's growing authority in the Islamic world. Last year President Putin for the first time took part in the summit of the Organisation of the Islamic Conference (OIC) in Malaysia. The dialogue between Russia and the Muslim world is currently gaining momentum and is likely to be one of the most important instruments to prove the failure of the "clash of civilisations" theory, and also a solid ground for the joint fight against terrorism.

Thus, the results of our actions during the last four years point it out very clearly that the Russian Federation has successfully positioned itself as a democratic nation with its independent and predictable foreign policy and a wide range of strategic partners.

I also find it essential to mention that the profound changes our country has experienced lately give us a real opportunity for opening a new page in the Russian-Turkish relations, which have been advancing towards a completely new level of multidimensional cooperation. We are satisfied to state that the Russian and Turkish views on the ways of solving the actual regional problems are rather close, e.g. as regards the Balkans, the Cyprus and the Middle East settlement, the situation in Iran and Afghanistan. Positive trends in the growing Russian and Turkish economies could provide a good momentum for further strengthening of our commercial and economic relations. The growing economic ties so far have assumed the locomotive role in the development of all kinds of our bilateral contacts. Let me mention just one figure: the economic turnover between our countries within the last year has reached a record mark of US$6.5 billion. Undoubtedly, the whole range of our multilateral relations provides significant reserve for their further intensification, be it in politics or the economy. Our priority is to join efforts in order to bring into use as much of that vast potential as possible for the mutual benefit of our two nations.

I therefore have no doubt that the visit of the distinguished Turkish guest to Moscow and the forthcoming talks will further back up the recent tendencies towards the good-neighbourliness, trust and cooperation between us.