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Old wine, new bottle

Ingo Mannteufel / dbDecember 4, 2014

Russian President Vladimir Putin presented his view of the country and the world in his annual address to the nation. He didn't have much new to say, according to DW's Ingo Mannteufel.

Vladimir Putin
Image: picture-alliance/dpa/Sergei Ilnitsky

People who love Russia and the Russians love tuning in to President Vladimir Putin's annual address to the nation. In melodious words, he knows exactly how to paint a picture of a good, strong, united Russia, where the state allows its citizens free economic expansion, takes care of the poor and the weak, and takes the necessary steps for the country's planned re-industrialization. Putin is completely caught up in the role of the good czar while announcing bureaucratic relief for small entrepreneurs, tax amnesties, low inflation figures, investment in infrastructure, industrial parks and scholarship programs. Once again Putin presented a long list of planned good deeds and legal mandates during his speech on the state of the nation.

Ingo Mannteufel
Ingo Mannteufel heads DW's Europe deskImage: DW

In light of the Ukraine crisis and the major differences with the United States and the European Union, the Russian president even found relatively mild words for foreign countries. In his speech, he repeated what has become the authorized position in Russia on Crimea and the Ukraine crisis. However, the speech did not have an openly confrontational tone when it came to the West or Ukraine. To the contrary: Putin stressed that Ukraine has a right to develop independently and that Russia would remain open to cooperation with other countries - in particular in the economic sector. Again, the good czar.

Only deeds count

Putin's lovely words about the Russia of today and of the future, however, are nothing but old wine in new bottles.

For years, Putin has been promising liberal, technocratic reforms and investments to re-industrialize Russia. In 2012, during his most recent election campaign, he even announced the creation of 25 million new, highly productive jobs by 2020. So far, there has been no noticeable effect.

Often enough, state investments vanish due to corruption and mismanagement. Putin has wanted to fight this for years by ordering security authorities to be watchful and rigorous. Yet it's interesting to note that the term "constitutional state" never once occurred in Putin's present speech.

There was also nothing new in Putin's goal of bringing Russian capital, mainly from tax havens abroad, back to Russia. To that effect, he promised a comprehensive amnesty. In his 2012 address to the nation, Putin took a fierce stance on the issue, coining the term "deoffshorization" of Russia's economy.

The reality, however, is quite different: just a few days ago, Russia's Finance Minister declared that Russian capital exports in 2014 amounted to between $120 billion (97 billion euros) and $130 billion - twice as much as in 2013. Moscow has by no means succeeded in retrieving Russian capital from abroad as a substitute for foreign investment to modernize the country's economy.

More of the same

As a result - and despite the boastful promises - Putin's address to the nation is nothing but a valiant "Keep it up." It was a speech by a politician who feels he is right on course and who is gathering the elite behind him. Whether this is a formula to master Russia's economic, social and political challenges is very questionable.

In recent months the oil price has slumped, and that has had a noticeably negative effect on state revenues and the value of the ruble - and thus on people's buying power. The sanctions the West imposed in reaction to Russia's Ukraine policies only strengthen that effect on the Russian economy.

Under these conditions how inflation is to be pushed lower than 4 percent while striving to reach GDP growth rates above the global average remains a mystery. Putin's speech clearly shows that Russia's political and economic model has exhausted itself. The country and its people face hard times. That's bitter for everyone who loves Russia and the Russians - despite Putin's fine words.