Financial crisis
In contrast, the president's tone for the domestic policy section of the address was softer.
Referring to the brief conflict with Georgia and the ongoing financial meltdown, Medvedev blamed the United States for both crises.
Medvedev stressed his government's action plan to minimize the consequences of the financial crisis, revive the banking sector and support individual sectors of the economy, saying Russia will fulfill its obligations to protect individual savings, pensions and social security.
However, he noted that the global financial crisis is far from over and called on the government and businesses to take this factor into consideration in their plans.
He said "each ruble should be spent effectively" and repeated earlier calls for it to become an international reserve currency and be used in pricing for commodities such as oil and gas.
The international political and economic system requires a dramatic overhaul, added Medvedev.
"The lessons of the mistakes and crises of 2008 have proved to all responsible nations that the time has come to act, and it is necessary to radically reform the political and economic system," he said.
"We will not give up our role in the Caucasus. We will overcome the global financial crisis and emerge from it stronger."
Continuity of Putin's policy
Medvedev's annual address also included proposals to extend the terms of the president and parliament to six and five years respectively, from their current four-year terms.
"We are not talking about a constitutional reform, but about amendments to the constitution. Really important, but still specifying amendments, which do not affect the political and legal essence of the existing institutions," explained Medvedev.
Speaking to an audience of about 1,000 lawmakers and government officials, Medvedev said the extension was necessary to enable the government to implement reforms more effectively.
To counterbalance an extension of the presidential term, Medvedev also proposed expanding the constitutional rights of the Federal Assembly, saying that control functions over the executive bodies should be given to the State Duma.
"A constitutional norm should be established, which would make it incumbent upon the government to report annually to the State Duma on the results of its work and on questions raised by the parliament," he said.
The proposals are certain to be approved by the legislators, because the Kremlin-friendly United Russia party, headed by Prime Minister Putin, holds two-thirds of the seats in the State Duma, analysts said.
With a longer presidential term, "pre-election squabbles will happen less frequently," Finance Minister Alexei Kudrin told reporters after Medvedev's speech.
It would be a "good period for any president to prove himself both in the economic and political fields," he added.
It remains unclear whether Putin will return to power as president in future. But even if he does not, there seems to be no other choice for Medvedev's successor than continue to follow Putin's policies, analysts said.
(Xinhua News Agency November 7, 2008)
