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During the recent press conference in the Kremlin, the President himself conceded that the year was "rather difficult."
In political terms, the passing year was probably the most challenging for President Vladimir Putin throughout his entire presidential career. During the recent press conference in the Kremlin, the President himself conceded that the year was "rather difficult." It is obvious, though, that the general positive outlook on 2004 the president mentioned is a combination of "pluses" and "minuses." First, the economy performed quite well. Despite higher than expected inflation rates and temporary slow down of economic growth in the middle of the year, the overall GDP growth reached 6.8% and the real incomes of the population went up by 8-10%. Positive trade balance ($80 billion) and gold and foreign exchange reserves of the Central Bank nearing the $120 billion mark protect the Russian economy from a possible collapse for years ahead. Even the scandal around Yukos (one of the "minuses" of 2004) did not seriously harm economic positions of Russia. Surprisingly, in 2004, Russia managed to accomplish all its plans in Chechnya, the place where in the last 10 years it had more "minuses" than "pluses." "Starting January 1, 2005, not a single Russian conscript will serve on Chechen territory," Mr. Putin announced at the press conference. In other words, the war in Chechnya is over, and federal troops are no longer needed there. No one could predict such a development of events even half a year ago, when Chechen President Akhmad Kadyrov was killed in a terrorist attack, and bands of terrorists from Chechnya infiltrated the territory of the neighboring Ingushetia. This was a serious "minus" both for Russia and Chechnya, although the subsequent presidential elections in Chechnya won by the former head of the Chechen Interior Ministry Alu Alkhanov and followed by a relative stabilization, including a decrease in the number of terrorist acts in the republic, indeed allow us to evaluate the general development of the situation as "positive." Paradoxically, Chechnya ceased to be a major "minus" for Russia in the Northern Caucasus. Russia's weakness in the region in 2004 became apparent in normally quiet and loyal North Ossetia, which has been considered the major bulwark of Russia in the Northern Caucasus for almost a century. The tragedy of the North Ossetian town of Beslan, where 1,200 teachers, school children and their parents were taken hostage by terrorists, became the grief of entire Russia. In addition, it significantly harmed the political image of President Putin. After a horrible conclusion of the Beslan hostage crisis, when more than 330 people, half of them children, were killed, the popularity rating of the Russian president, which stayed at 70% for a long time, started to slide down. To Mr. Putin's merit, he did not make any attempts to save his declining popularity after the tragedy, but took a series of rather unexpected and unpopular steps aimed at increasing the effectiveness of state administrative bodies, which was absolutely necessary, in his opinion, to counter the terrorist threat. Mr. Putin proposed to abandon the system of direct vote for governors and to make a transfer to elections of governors by presidential appointment, approved by legislative assemblies of respective regions. Another initiative proposed by the president was to introduce the State Duma elections based solely on party ballots, therefore eliminating elections in one-mandate districts. Finally, he suggested forming the Public Chamber, a public body on a federal level, which is supposed to become an intermediary between society and the state. During the press conference in the Kremlin, the Russian president only briefly touched upon the subject of political reform. However, he made it absolutely clear that he considered the reform as an obvious "plus." The events in Ukraine in 2004, the "orange revolution," the split of Ukrainian voters into "pro-western" and "pro-eastern," an active "anti-Russian" policy conducted by Poland in relation to Ukraine - all these events certainly cannot be counted as "pluses" for Russia. Mr. Putin's present task, therefore, is to minimize all possible "minuses." The press conference in the Kremlin showed that he has already started to take appropriate steps in that direction. Russia's major goal in Ukraine is to protect its economic interests. Russia has to invite Ukraine to join the Common Economic Space (UES) (in such a way that it would not reject the invitation), shared so far by Russia and Belarus. "We will accept any choice made by the Ukrainian people and will work with any Ukrainian president," Mr. Putin announced. If such work is successful, and the Russian president hinted that it would be one of Russia's priorities in the future, we will be able to reiterate that 2004 was indeed a "positive" year for Russia.
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