The following is a speech by Russian Acting Prime Minister Sergey Stepashin in the State Duma 19 May. It provides a concise statement of his ideas and philosophy and can help provide you with a better sense of Mr. Stepashin's thinking. Source: ITAR-TASS World Service.

Esteemed Speaker Gennadiy Nikolayevich Seleznev, esteemed State Duma deputies! Speaking from this rostrum today, I feel and am aware of the huge responsibility which will rest on my shoulders if you deem me worthy to head the government of the Russian Federation. I am well aware that the main requirement of me and my future team is not simply to maintain the level of stability which has been achieved. Our mission is to create a fundamentally new economic context and to make the only correct decisions which can secure the best living conditions for the people and restore the greatness of a country as mighty as Russia.

It is no secret that we are in the midst of a protracted economic crisis. So much has been said about the causes of this that there is clearly no point in reiterating them in detail in this enlightened company. You know as well as I how deep we have got in the situation over Russia's domestic and foreign debt, how hard it is to restore our finances and banking after the August crisis, how difficult to pay current wages and pensions. More than one government team has already tried to deal with these. Various economists have vied over ways of getting out of crisis, sometimes costing us time, which is so precious in our situation, costing us the patience of the nation and costing us trust in the authorities as a whole. Pressure in society is now at its limit. I am sure that in the present circumstances there can be no debate over programmes and we must not get bogged down in ideology. I will be demanding of those who take up the economic jobs in the government a professional approach to the job and exact implementation of all the decisions which are made.

Please understand me correctly. Once we agree on the fundamental principles of the Cabinet's programme of action, it has to become mandatory for all involved in the process.

The previous, Primakov, government stopped the country falling into the abyss, but we have not yet been able to change the situation fundamentally either in the economy or in the social sphere. It is of course exceptionally important to retain the positive experience which we have managed to build up over the eight months of the previous cabinet and to preserve its skeleton. However, we do now need a new, more decisive and energetic approach. Now, when the country is facing the task of regeneration and moving with dignity into the new millennium, the predominance of a policy of political and economic stabilization alone is not enough.

The time has come for changes in the tactics for following this course.

There is no longer any place for half-measures and compromises. The times require us to take bold yet simultaneously carefully considered steps. We will not only develop the market, we will defend property and initiative.

We are prepared to employ the most decisive measures of state influence and tough financial regulation to defend these principles.

I am no supporter of whipping up passions, but we do have to look truth in the eye. A considerable proportion of the people of our country lives below the poverty line. Indicators of the standard of living, which fell sharply following last year's crisis, remain extremely low. People are tired of waiting and endlessly hoping for better things.

This cannot fail to be of concern to us on the eve of the forthcoming elections to the State Duma and for the president of Russia. History shows that poverty and economic recession create favorable conditions for the stooges of criminal structures to come to power. This scenario would be ruinous for Russia. All the political forces in the country are aware of the exceptional danger of this, and at the same time of its great likelihood, unless decisive measures are taken. It is our patriotic and civic duty to leave behind people with other interests than those of the state. We have no right to advance personal, corporate or party values against the most important interests, those of Russia and its people. It is not by chance that when people ask me if there should be a coalition government I reply that it is important to have not a coalition of politicians but a coalition of professionals. Hence my firm conviction that the government must consist of the best specialists, regardless of the party to which they belong.

I should like to remind everyone from this platform that the government is not a puppet body. In keeping with the constitution, it is the government that exercises executive power in Russia. And no pressure on it from various influential groups and, even more so, from semi-mafia structures is permissible. I am determined to pursue that policy without the slightest deviation and without hesitation.

Now, esteemed colleagues, permit me to formulate the two principles that, in my view, must underlie the activities of any government.

First - stability in the economy means stability in society.

Second - the state exists for people, and not people for the state.

I do not intend to resort to any extreme measures. Some people have already managed to create such an aura around my appointment. The general has come to power, they say, the firm hand, Russia on the verge of dictatorship, and they even compare me with Pinochet. No, I am not General Pinochet. My name is Stepashin. I am certain that the path of decisions based on force rather than on the economy is unacceptable for the country. Russia is a great power, possessing immense natural resources, a production base and vast intellectual potential. I consider it my duty not only to make sound use of what we have, but also to create the necessary conditions for the revival of our economic might. Russia will not be a raw materials appendage of the developed industrial countries. But to guarantee this, we have to restore the trust of Russian and foreign investors, ensure that the exchequer is full, keep a tight rein on expenditure, and channel money and resources into the national economy. To this end, I am counting, primarily, on the support and assistance of the president, the deputies and the members of the Federation Council. Together we determine the priorities, and together we move towards attaining them. Nothing can be done without the smooth functioning of the executive and the legislature, without constant businesslike cooperation between the Centre and the regions. Nor can anything be achieved without rigorous monitoring to see that the decisions taken are carried out. I regard the main principle behind our work as being mutual responsibility to one another and to all citizens.

We must always remember that every one of our actions or failures to act has a direct effect on our citizens.

Esteemed deputies, the day before yesterday [17th May] in the Federation Council I said that the activities of the government must take into account the interests and needs of all the Russian regions, this is absolutely the case. In the last few days alone I have received hundreds of specific proposals for the government programme. All of them, and of course including those I received yesterday during my meeting with members of the parliamentary factions, will definitely be taken into consideration. Currently they are being studied and analyzed. This, by the way, must be an unshakable principle of the work of our government.

But now I would like to note the basic strategic areas which the government must work on.

The first, the most important area is social policy. The previous government tried to pay off some of the money it owed for wages, pensions, benefits and financial allowances. We are taking all these obligations upon ourselves. I want to stress this again - all the obligations of our predecessors to pay off these debts, but our task is to ensure they do not recur. Moreover, as regards the implementation of a package of economic measures, I consider it necessary to ensure growth in people's real incomes, which all the deputy groups have talked about. I am in complete agreement with them. Including indexing payments to public sector workers and pensioners and, moreover, in the very near future. The state does not have the right to gaze with indifference on the problems of those who have not been able to adapt themselves to the new living conditions, those who have not gained from the reforms, but only suffered from them.

I myself am a supporter of reforms, but all these reforms are necessary not for the sake of reforms, they are necessary for the sake of the people. The package of bills recently presented to the Duma by the previous government is aimed, as a first step, at achieving this goal.

Unless these laws are adopted as quickly as possible it will be impossible to relieve the burden of Russia's external debt.

The second area is reviving domestic industry. There has been some improvement in the industrial sector of late. But we cannot make do with this. Let's speak frankly: we now need a real upturn, and not the upturn you get following a sharp fall in the level of industrial output after default. To do this, we must finally resolve the problem of the debts enterprises owe to each other and to the state, reduce the tax burden, review fines and penalties and secure fair prices, I want to stress once again, fair energy prices. The government will give priority to the key sectors of industry, first and foremost to the science-intensive industries and high technology. These are the foundation of the military-industrial complex. It would appear to be worthwhile - and I would like to consult with you here about this - setting up a special state committee for the problems of the military-industrial complex, which is where the key factors of management of the industry will be concentrated. Incidentally, what is happening at the moment in Yugoslavia, let's be blunt, is after all not only a strike against Yugoslavia, perhaps not so much against Yugoslavia, but a strike against Russia. We need to draw conclusions from this.

Thirdly, the government is committed and will defend and support domestic producers and the home market. This is particularly important in the production of foodstuffs, where we are most acutely feeling the pressure of imported produce. Bringing in food products from abroad is crushing, if it has not already crushed, our domestic agriculture, for which our country was famed for centuries, it is driving us into enslavement to people abroad and, as a consequence, undermining Russia's security.

Together with you, esteemed deputies, we have already discussed possible ways to solve this problem. I share many, perhaps even the majority of the views that you have expressed. The government will necessarily heed the voices of those who has first-hand knowledge of the problems of the countryside. A specially appointed deputy prime minister of the new government will be fully in charge of this work, as many of you have suggested. And when appointing him or her, we will necessarily seek your advice and will consult you. Naturally we would like - and here I address first of all our Agrarian faction and, as a matter of fact, all and everyone - we would like him or her to be a person who knows land, loves it and can work on it.

Talking about the cadres - yesterday and the day before certain names of candidates for ministerial and deputy ministerial posts were named. I will repeat what I said yesterday, that I can't give the names of all those whom I would like to invite to work in the government.

The fourth area is the decriminalization of the economy. The shadow economy is almost more efficient and dynamic than the legal one. Millions of people are engaged in its operations. In the absence of sufficiently effective actions by the law-enforcement bodies and their coordination, corruption and crime are spreading and destroying the state from within.

My experience of service in the law-enforcement bodies allows me to claim with full awareness that it is there, I stress, it is precisely there that the main knot of problems lies which in fact paralyze all the spheres of Russia's life today.

With your permission, I will quote three examples. First, Krasnoyarsk.

Last autumn the Interior Ministry sent there a full-strength investigating group headed by my first deputy, Vladimir Kolesnikov, which included representatives of all the law-enforcement bodies, the Finance Ministry, the Central Bank and the Tax Inspectorate. Incidentally, the operation in Krasnoyarsk is continuing today. More than 50 criminal cases have been instituted, some of them have already been submitted to courts.

Some people are far beyond the boundaries of Krasnoyarsk Territory. We have managed to prevent the embezzlement and theft of property belonging to Krasnoyarsk Territory. And here is the result: whereas in April last year R [rubles]60 million were paid into the budget of Krasnoyarsk Territory from domestic industry, in April this year the figure was R501 million. Aren't these internal sources and internal reserves for you? Second, Novorossiysk. After a substantial amount of work, which is continuing there right now, the Krasnoyarsk Territory budget received an additional sum of R100m in January this year alone because we cleared the port of Novorossiysk of criminals. Both the governor of Krasnoyarsk Territory and the authorities in Krasnoyarsk Territory have managed to settle up in full with the budget officials. A certain amount has already been done - and I want to say that we have not eased up on that work - to put the alcohol market in order. You know what has happened in our country over the past few years. In Soviet times, the country used to receive something like 57-80 per cent of budget funding from excise duty, whereas last year the figure reached only 3.4 per cent. This year, the figure for this month climbed to 17 per cent. Before the end of the year, we have set the target at 25. The collection of excise duty has virtually trebled in comparison with the same period last year. That is a further reserve for topping up our exchequer and the regional budgets. One further, very important task facing our government today is to repatriate the billions of dollars that have been illegally taken abroad by various businessmen in recent years. A mechanism for the return of capital does exist, although, to be honest, it is still not working properly. In the first place, it is a question of creating stable economic and political conditions, appropriate mechanisms for protecting investors' rights, including those of foreign investors. The law-enforcement bodies are also ready to take the matter in hand seriously, but they are in dire need of your legislative backing.

We have to remember that every day of delay means further hundreds of thousands of dollars draining away abroad and working for the Western, rather than the Russian, economy.

The sixth area is continuing the negotiating process with the international financial institutions and our creditors. It is also essential to remedy a situation in which funding that is attracted with such effort is expended inefficiently and is often blatantly stolen. That is why, on the first day of my work as acting prime minister, I set the task of carrying out an extensive analysis of the problem of the use made of outside loans. An interdepartmental commission, headed by the prime minister, will be set up at the end of the week.

Seven - revival of the banking system. This remains in a dismal state.

Many major banks are essentially bankrupt. Their future needs to be determined in such a way that they carry out their main function, namely providing accounts and loans for the public and the real sector of the economy.

And finally, the last thing - unconditional executive discipline. Most of the correct decisions that have been adopted recently have remained on paper alone. They have been swamped in rhetoric, entangled in red tape and brought to a grinding halt. We need tough, and I would like to stress this again dear colleagues, tough administrative will, and we will have it.

Dear deputies, the range of areas of work which I have listed does not, of course, exhaust all the tasks that we have to tackle. You and I have already managed to discuss many of them during our very constructive consultations. I am grateful to all the factions for their interesting proposals on the organization and priorities of the work of the future cabinet. However, in addition to urgent steps, we also have a long-term task. Russia is on the threshold of the 21st century. Russia's prosperity and well-being will be achieved only through fully uniting all the nation's forces and through movement towards the revival of Russia.

In conclusion I would like to say once again that I do not forget for a moment that Russia's citizens expect specific and positive results from the government and they expect an improvement in their lives as soon as possible. I am convinced that with the support of the Federal Assembly the government is capable of meeting these expectations. After all, there is nothing more important for those entrusted with power than concern for the interests of citizens and concern for Russia. I believe that for every one of us this simple truth is a rule of life.

Thank you for your attention.

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