MOSCOW, Nov. 12 (Xinhua) -- President Dmitry Medvedev on Thursday elaborated a vision for Russia's transition into an innovative and democratic country that moves beyond its Soviet legacy.

    During his annual state-of-the-nation address to lawmakers and government officials, the president primarily focused on the need to modernize the Russian economy.

Russian President Dmitry Medvedev speaks during his annual address to the federal assembly in Moscow, November 12, 2009. (Xinhua/Reuters Photo) Photo Gallery>>>

    Russia's prestige on the world stage can't be determined by past achievements, he said, noting that the country's oil and gas production facilities, nuclear weapons, and industrial and housing infrastructure were mostly built in the Soviet era.

    The modernization of the Russian economy was an issue for the country's survival under current circumstances, Medvedev stressed.

    "This country needs all-inclusive modernization in the 21st century. That would be our first modernization based on democratic values and institutions," he said.

    Russia would create a smart economy generating unique knowledge and technologies instead of one that heavily depends on raw materials, Medvedev said.

    In particular, he named five priority areas in economic development: energy efficient technology, the nuclear sector, information technology, space, and medicine.

    Medvedev admitted that the global economic crisis had hit Russia harder than other countries.

    "The need for change has grown in recent months. The international financial crisis affected everyone, but the economic decline was more profound in Russia than other countries," he said.

    Medvedev said the government would continue to adopt anti-crisis measures although the worst part of the economic downturn had passed.

    The president also instructed the government to work out steps to improve the country's financial system to meet the needs of economic modernization.

    The Russian government has allocated more than 1 trillion rubles (35 billion U.S. dollars) to help ailing industrial companies since the financial crisis broke out last year.

    Medvedev warned that the government would only support companies that had explicit plans to raise efficiency and implement high-tech projects in the future.

    Talking about military modernization, Medvedev said more than 30 intercontinental ballistic missiles and three nuclear submarines would be provided for the Russian armed forces next year.

    "Next year, we need to supply to the army over 30 ground-based and sea-based ballistic missiles, five Iskander missile systems, some 300 armored vehicles, 30 helicopters, 28 combat planes, thre enuclear submarines, and one corvette combat ship," he said.

    Those measures, he said, would help to create an army that "will rule out any chance of threats to us and our allies."

    The president called on the heads of defense enterprises to "seriously boost the quality of products and reduce their costs."

    He also instructed the government to establish an effective system of orders for defense products in a bid to observe balanced deliveries of modern weaponry to Russia and foreign troops.

    Medvedev touched on aggravating tensions in the turbulent North Caucasus, describing the situation as Russia's top domestic political problem.

    The North Caucasus republic of Chechnya, along with neighboring Dagestan and Ingushetia, has seen frequent militant violence in recent months despite the end of a decade-long anti-terrorism operation in Chechnya in April.

    Medvedev said the government should do more to eradicate the poverty and corruption that have offered fertile ground for clashes in the region and urged an effort to combat international terrorism and eliminate criminals there.

    On diplomacy, Medvedev said Russia would continue to follow pragmatic foreign policies aimed at improving the living standards of Russians.

    "We will work actively for the United Nations to strengthen its position," he said, calling for multilateral, U.N.-mediated solutions to problems such as the deadlock over Iran's nuclear issue.

    He added that Russia's foreign policy was not targeted against anyone, including NATO.

Medvedev says new weapons priority for Russian army

    MOSCOW, Nov. 12 (Xinhua) -- Russia will supply its armed forces with more than 30 intercontinental ballistic missiles and three nuclear submarines next year, President Dmitry Medvedev said Thursday in his state-of-the-nation address.

    New military hardware remains a high priority for the army, Medvedev said in his speech before the Federal Assembly. Full story