- The Washington Times - Monday, April 9, 2001

Russian President Vladimir Putin gave his "state of the federation" address to the Russian Duma last week, highlighting, some of the dangers that lie ahead. Speaking before parliament, Mr. Putin told his already hard-pressed countrymen to prepare for an economic slowdown and seemed to have stumbled on some sense, if not compassion, in regards to Chechnya. For a president who has been very concerned with Russian honor and dignity, this acknowledgment of the countrys vulnerabilities was refreshing.
Mr. Putin warned that "the worsening of several key economic indicators" demonstrated that Russia didnt have "the conditions that ensure sustained growth." He said, "Unless we start acting today, tomorrow we may enter a prolonged period old economic stagnation." For those who thought that the Russian economy did that already some 10 years ago, it is a fact that high oil prices helped produce a boost of almost 8 percent economic growth last year.
Also, Mr. Putin stressed the importance of judicial reform to counteract corruption and create a more predictable and stable business climate. The president acknowledged such chronic inequities and inefficiencies in the judicial sector that it is no wonder Russia hemorrhages about $20 billion a year in capital flight. Mr. Putin said that excessive pretrial detentions, the low status of judges, contradictory laws and failure to even carry out court rulings are among the factors prompting a chaotic "shadow justice" to emerge, as people look outside the law to settle grievances.
Mr. Putin also criticized excessive government restrictions, which stifle entrepreneurship. "Our economys dependence on raw materials, and therefore our vulnerability to world commodity prices, has not only been preserved but has intensified." The president said Russias currency should be floated, tax collection should be made more equitable and import duties should be reduced in order to help Russia win membership in the World Trade Organization.
Mr. Putin did not mention the pressing need for privatization, which should be Russias chief priority. Putting state assets in private hands would significantly reduce the opportunities for mischief. And sadly, Mr. Putin neglected to attach any sort of timetable or concrete plan of action to his wish list of reforms.
While he said he would start to withdraw troops from Chechnya, Mr. Putin failed to acknowledge the folly of having warred with the region to begin with. Now, after the Chechen campaign, Russias post-Soviet future has been indelibly marred by the mass graves human rights groups have discovered in the breakaway region. While Mr. Putin clearly has grasped the basics of Russias economic turmoil, his legacy in other ways will be a black mark.

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