May 10 (Bloomberg) -- Russian President Vladimir Putin vowed to use the revenue from oil exports to improve living standards for ordinary citizens, saying this was his government's top priority.
He singled out the declining population as Russia's greatest problem, though stressed the need to raise pensions and spend more on education and health care as well as payments to families to have more children.
``The most acute problem of modern Russia is demography,'' Putin said today during his annual state of the nation speech to lawmakers in Moscow, adding that the country has been making ``fundamental efforts directed at improvements in the lives of citizens.''
Russia, the world's biggest energy producer, is enjoying economic growth that reached 6.4 percent last year, supported by high prices for its main export commodities. As president this year of the Group of Eight industrialized nations, Russia is also using its clout to play a greater role in issues such as the Iranian nuclear crisis and Middle East peace process.
Putin said the country's population was still falling by 700,000 people per year. Russia must take urgent steps to reduce the high mortality rate, introduce an effective immigration policy, and increase the birth rate, he said.
He said he wanted to see Russians living abroad return to the country, though said ``no immigration will solve our demographic problems if we do not develop stimulus for the birth rate here.''
Living Standards
Raising living standards has been fundamental to his policy for several years, Putin said. A revenue windfall from high oil prices has made it more than ever possible to achieve it now, he said, telling lawmakers ``these plans have been growing and maturing for over 10 years but now they have to be realized.''
Russia's growing wealth, and increasing self confidence as it emerges from the instability of the 1990s following the break up of the Soviet Union, have seen the country play a greater international role.
Russian foreign policy will be firmly based on international law and the top foreign policy priority will be to develop relations with the former Soviet republics which make up the Commonwealth of Independent States, he said.
``Relations with our closest neighbors are the most important aspect of our foreign policy,'' he said.
