Putin’s Red Square show a hit

Former president and now Russian Prime Minister Vladimir Putin spent over three hours yesterday in a live broadcast from a studio near Red Square, trying to compose ordinary Russians about the state of the country's economy, by announcing a series of measures which include pumping in billions into the economy.

While answering a record 72 questions from the 2.2 million submitted on issues both domestic as well as international, most of the questions were related to the ailing economy and how he intended to overcome the current financial crisis and not see a Russia of the 1990's when the country was in economic chaos.

Ordinary Russians do not easily forget the 1990's when the country defaulted its $40 billion of debt when the ruble devalued, wiping out the life's savings of millions of people and pushing the government to near bankruptcy.

Reaching out to the poorer section of society as they are the ones affected by rising inflation, a weakening ruble and layoffs, "We have every chance of making it through this difficult period with minimal losses to the economy and, most importantly, for our people," Putin said.

The three-hour live broadcast was an instant hit with ordinary Russians as they felt some one on top was there to take them out of the present crisis and reassure them that Russia will make it through these difficult times.

The ongoing financial crisis has seen Russian stocks taking a beating wherein the two main stock exchanges were closed down on a number of occasions, the rouble has been hammered by investors pulling out their money from Russia and to compound the problem more, the mainstay of its economy- money from oil has dwindled due to the sharp decline in crude prices seen over the past two months and sees no signs of recovering.

From its huge $450 billion foreign exchange reserves, accumulated mainly due to high oil prices, Russia has pumped in more than $200 billion in bail-out money to banks and major companies as well as a few oligarchs to help them restructure their dollar based foreign debts.

He said that the state would stick to its social obligations and not go back on the already committed in residential and medical services, education and the pension system.

He also committed to raise the monthly unemployment allowance to 4,900 rubles ($175) and pensions by 34 per cent in 2009 and will pump in more money in regional governments and Federal Labour and Employment Service to enhance employment, which would see a growth of 2 million next year from 1 million this year.

"We should say directly that it will be a difficult period in the world economy and in ours as well, and we should be prepared for this morally, organizationally, financially and even politically," he said.

"I still hope that we won't have mass unemployment, but the number of people temporarily losing their jobs will definitely rise," he added.

Putin also said that he would increase funding to provide housing for retired military personnel, state guarantees to banks to ease pressure on mortgage holders and lower taxes on oil companies to lower domestic fuel and gasoline prices and subsidised air tickets for people who stay in distant regions of Russia.

Many critics said that the entire show was stage managed to boost Putin's popularity but as he finished the last question, he said "Most of all, I love Russia.''

Warm on Obama

As Moscow starts to freeze, Russian prime minister Vladimir Putin sees the ice melting in Washington's attitude toward Russia, with President-elect, Barrack Obama sending out "positive signals" after the Bush administration returned to near cold war tactics, due to the Georgian conflict.

In a remarkable change of pitch, the former KGB colonel, said that the incoming administration of US president-elect Barack Obama, has sent "positive signals" which could help in improving ties with its old, cold war enemy. (See: Putin's Red Square show a hit)

Putin held out the hope of better improved relations with the US as the new incoming administration's view on the planned missile defence shield in Poland and the Nato membership for Ukraine and Georgia is positive.

NATO foreign ministers yesterday took a decision not to extend membership to Ukraine and Georgia and people close to Obama have said that there is no need to rush the issue or to harm relations with Russia.

''If these are not just words and translate into real actions, we will respond in kind,'' he said.

Russia has also been given to understand from sources close to the incoming Obama administration that it would reassess the need for a missile defence system to be placed in Poland and the Czech Republic so as to not harm Russian foreign policy toward the US.

Although blaming the US for exporting the current financial crisis to all parts of the globe, he said that the US will still remain one of Russia's largest trading partners.

In striking a very different tone compared to the recent long string of criticism on Washington's foreign policy, more so with its war with US ally Georgia in August, where he blamed the Bush administration of starting the crisis to help Republicans win the presidency.

When asked by one caller, whether he had indeed told French President, Nicolas Sarkozy, that he would hang Georgian President, Saakashvili ''by his one ball'' during the war over South Ossetia, he laughed and retorted, ''Why one, why not both?''

Putin dismissed the idea of going back to being the President, saying he and his protégée, President Medvedev "interact very well" and formed an "effective team," although he wants to rewrite the constitution by increasing the term of the President from four to six years.

"The next elections in the Russian Federation will be held in 2012. . . . We will have to get through to that time, then we will see," he said, adding that he had no intention of resigning or reshuffling his cabinet. "Running away from your problems has never been my rule."

He showed his tough approach while answering questions on the threat of cutting off gas supplies to Ukraine, "Go to Germany, enter any shop and tell them: I want to take a Mercedes for free -- who will give it to you? Or for a half price?" Putin asked rhetorically.

Ukraine owes Russian $ 2.5 billion for the gas it supplies to Europe and is asking Moscow to sell it for half the price paid by other European buyers.

In the past, Russia had briefly cut gas supplies to Ukraine in 2006, over a price dispute, which had raised questions as to whether Moscow was using energy as a political weapon.