I’ve been writing my new piece for PunditWire on Vladimir Putin’s long State of the Nation speech. I’ll link to it when it goes up. The speech was a full 1500 words longer in the English version, showing how the Russian language is good at using endings of words to cram in subtleties of meaning.

Alas Mr Putin showed that he is no slouch when it comes to musty needy exhortations on economic policy:

  • We must learn to harmonise two goals: containing inflation and stimulating growth
  • We must escape the trap of zero-level growth
  • Within three to five years, we must provide our customers with high-quality and affordable medicines and food produced mostly in Russia
  • We must lessen our critical dependence on foreign technology
  • Our commodities and infrastructure companies … must rely on domestic producers
  • We must only buy distinctly unique equipment and technology abroad
  • We must prevent internal monopolism
  • Import substitution programmes must encourage the creation of a large group of competitive industrial companies
  • We must remove as many of these restrictions as possible. We must provide investment incentives
  • We have large domestic savings, which must be used
  • We must invest as much as we save. Our savings must work for the national economy and development, rather than the export of capital. To do this, we must seriously strengthen the stability of our banking system

There were dozens more ‘musty’ expressions of different sorts in this speech. It is imperative that. It is essential that. It is crucial to. We should. They should. They need to.

Poor technique.

This sort of language purports to show leadership and purpose. In fact it points to a leader’s refusal to face personal responsibility for specific outcomes, and suggests an inability to analyse correctly what is going on. If so many important things ‘must’ or ‘should’ happen or are ‘crucial’, why have they not happened so far? And why should anyone expect them to happen in the future?

This is important for Russia, not least because President Putin offered a ‘no questions asked’ amnesty to those Russians who have taken their money out of the country – if they bring it back. He had little choice: as even Russia’s own top officials concede, huge sums of money are voting with their feet against his policies. Thus Mr Putin:

I propose a full amnesty for capital returning to Russia. I stress, full amnesty.

Of course, it is essential to explain to the people who will make these decisions what full amnesty means. It means that if a person legalises his holdings and property in Russia, he will receive firm legal guarantees that he will not be summoned to various agencies, including law enforcement agencies, that they will not “put the squeeze” on him, that he will not be asked about the sources of his capital and methods of its acquisition, that he will not be prosecuted or face administrative liability, and that he will not be questioned by the tax service or law enforcement agencies. Let’s do this now, but only once. Everyone who wants to come to Russia should be given this opportunity.

We all understand that the sources of assets are different, that they were earned or acquired in various ways. However, I am confident that we should finally close, turn the “offshore page” in the history of our economy and our country. It is very important and necessary to do this.

I expect that after the well-known events in Cyprus and with the on-going sanctions campaign, our business has finally realised that its interests abroad are not reckoned with and that it can even be fleeced like a sheep.

And that the best possible guarantee is national jurisdiction, even with all of its problems.

The problem is that Russian and foreign investors alike rightly do not trust that latter claim. The ‘best possible guarantee’ that your money will not be grabbed by the state is to park it in a country with the rule of law, such as the UK or Switzerland.

His speech was also interesting for its attention to Russia’s demographic trends. According to the president, they are looking up:

In the early 2000s, UN experts predicted further demographic decline in Russia. According to UN forecasts, the population of our country was supposed to shrink to 136 million people by the end of 2013. On January 1, 2014, the population of Russia was almost 144 million people, 8 million more than forecast by the United Nations.

In addition, as you know, Russia registered natural population growth for two years in a row in 2013 and 2014. It is expected that by late 2014, with Crimea and Sevastopol included, Russia’s population will exceed 146 million people. Our demographic programmes have proved their effectiveness, and we will continue to implement them.

Hmm. President Putin did not mention the startling fact that many more Russians are leaving the country, with 40,000(!) applying for asylum in other countries. Against that plenty of new people are arriving, mainly from elsewhere in the former USSR.

How to assess the net trends? Some Russians don’t care if the ‘creative classes’ pack their bags and go elsewhere:

“Russia won’t lose anything if the entire so-called creative class leaves. What’s the creative class anyway? For me, a woman who gets up at 0500 to milk a cow is creative because she produces something. Not some guy with a stupid haircut who sits in a cafe all day long writing in his blog,” said Vitaly Milonov, a Member of the Legislative Assembly of Saint Petersburg

It’s a view! But back in the real world the modest cow-milker is not going to produce many new jobs and ideas for diversifying Russia’s economy away from its excessive energy dependency and associated corruption, a big theme in President Putin’s musty vision for a brighter Russian future.