"Democratic procedures should not develop at the expense of law and order, or stability which has been so hard to achieve, or the steady pursuit of the economic course we have taken," Putin said. "In this, I see the independent character of the democratic path we have chosen. Therefore, we will move forward taking into account our own internal circumstances but of course, based on the law and constitutional guarantees."
During his 45-minute speech broadcast live on state television, Putin called for a more effective legal and political system closer to the constitution, slamming corrupt bureaucrats for lining their pockets at the expense of the country.
He said reforms were needed to encourage foreign investment in Russia. He added, though, that existing restrictions on foreign investors to buy stakes in strategic Russian companies would continue.
And he went on to criticize Russians who hid their undeclared savings in offshore accounts and proposed a new 13-percent flat tax rate on all undeclared capital.
Shoring Up Government
Following a series of measures aimed at consolidating the Kremlin's power, Putin's statements on the need to shore up the government came as little surprise.
Putin, however, failed to mention recent mass protests that toppled the governments in the former Soviet states of Georgia, Ukraine, and Kyrgyzstan. Russia had been critical of the protests but unable to halt them.
He declared that Russian authorities would not hesitate to crack down on any illegal unrest in Russia.
"The consistent development of democracy in Russia is possible only through legal, lawful means," Putin said. "Any unlawful methods of struggle for ethnic, religious and other interests contradict the principles of democracy. The state will react to such attempts by with legal, but tough, means."
Putin appeared to criticize the West and some former Soviet states -- particularly the Baltics, which are members of NATO and joined the European Union in 2004.
"We hope the new members of NATO and the European Union on post-Soviet territory will prove in practice their respect for human rights, including the rights of ethnic minorities," Putin said. "Those who do not respect, observe or ensure human rights have no right to demand that human rights be respected by others."
As expected, Putin addressed the issue of terrorism, describing the threat as "very serious" and underlining the importance of hiking up the work of law-enforcement bodies. Russia was shaken by a series of terrorist attacks in 2004, including the Beslan hostage tragedy that killed more than 300 people in early September.
"Over the past few years a great deal has been done in the fight against terror. But there should be no illusions here. The threat remains very serious, and we continue to receive very painful blows," Putin said. "Criminals continue to commit their terrible acts, trying to intimidate society, and we should muster up our courage and continue our work to eradicate terror. Should we display weakness or laxity, losses will be immeasurably greater and they will bring about a nationwide catastrophe."
Putin remained tight-lipped on the 2008 presidential election, in which he is barred from running for a third term.
Many speculate the Kremlin will ensure that a Putin loyalist wins the vote, or that the constitution will be modified to allow him to seek a third term. Putin, however, has said that he will step down in 2008.
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