The electoral campaign has demonstrated
yet again that we live in a strange mythical state. We
have come to regard the bankruptcy of state finance as
a sign of normal state management. We are being asked
to believe that the economy is undergoing a slight upturn.
At the same time our state's finances are bankrupt, we
have a conventional state budget and conventional state
rule. Our state institutions are in such a lamentable
state that they are incapable of collecting taxes and
In a bid to retain power, Yeltsin's circle created a
party of governors. They explain to the people that this
is the party of a real "right" power. Why don't
they honestly admit here that although 62% of Russia's
budget is being spent in federation subjects, nobody knows
how federal money is being spent. However, everyone knows
about the scale of corruption in the regions.
I, for example, don't know how we can resolve the problem
of corruption in the current circumstances. First and
foremost I don't know, as I don't perceive any attempt
by the authorities to take steps to resolve this problem.
There are ways to replenish state finances. For example,
regulation of problems at customs. Our country loses annually
$3.75 billion owing to unregulated customs' regulations
between Russia and Belarus. Now we plan to sign a Union
Treaty with Belarus in the near future. This is much more
than any IMF loan. And now we will also have to face the
task of strengthening our already common borders, whereas
expenditures are likely to be financed from Russia's budget.
But I know how difficult this is to do: not a single
decision on issues related to the customs authorities
can be taken without overcoming serious resistance. The
people with interests connected to the customs authorities
hinder any attempts to install order here.
In general we have observed strange things in issues
connected to certain individuals interested in some sectors
of our economy. Today Russia's government is in such a
state that it has to conduct negotiations with the country's
largest financial and industrial corporations, so that
the latter fulfil their fiscal obligations.
We know too well that the issues of tax payments are
being resolved on a case-by-case basis. Instead of complying
with effective legislation, agreements are reached by
the government and the largest corporations on who to
pay and how much tax they need to pay.
I think that we need to create a uniform tax system,
which would inter alia encourage our black economy to
become legalised. But the black economy constitutes about
70% of Russia's economy. We propose a potentially extremely
rapid resolution of the problem of the black economy,
as we cannot expect to make further progress otherwise.
Russia still survives at the expense of its natural resources.
These resources accounted for 75% of the Soviet Union
budget. The situation has not altered radically since
then. We must make the science and technology branches
the main resource of our future economic development:
high precision machine-building, the instrument-making
industry and aircraft building. Only then will we be able
to become one of the most developed countries. Only them
will we be able to resolve the problems of the education,
free health care and public security systems. (Extracts
from a speech in Tolyatti