Moscow: Russian President Vladimir Putin said Russia must take steps to increase the birthrate, calling the persistent population decline one of the most serious problems facing the country.
In his seventh annual state of the nation address since he was elected in 2000, Putin also called for focus on investment and innovation to win its deserved place in the world economy.
Putin said there was a "consensus in society" that Russia's demographic problems must be tackled and said the government would introduce incentives to encourage young couples to have more children.
Expressing concern over what he said was an annual decline of nearly 700,000 people a year, Putin said that childcare benefits should be increased and that women who have a second child should be supported because they are often out of the workforce for a long time.
"We must at least stimulate the birth of a second child," Putin said, adding that concerns about housing, health care and education prompt many families to stop at one child.
He called on the government to work more effectively to raise Russians' standard of living, and made a customary — though ineffective up to now — dig at state corruption, saying that a number of officials "have enriched themselves at the cost of the majority of citizens."
He also said Russia needed a strong military not only to guard against potential attacks, but also to resist political pressure from abroad.
Putin acknowledged that his originally stated goal of doubling gross domestic product within a decade now looks unlikely, due to growth falling slightly short of expectations in the last couple of years.
However, he stressed that overall economic developments have been positive, and took credit in particular for the explosive growth in the market capitalisation of gas monopoly OAO Gazprom over the last year.
"This didn't happen by itself but as the result of certain actions by the Russian government," Putin said.
He identified obsolete equipment and poor energy efficiency as two of the factors holding back the Russian economy's competitiveness. Much of the equipment produced in Russia is "10 years out of date" and he said "even taking into account the climatic conditions of our country, energy efficiency is much lower than in competing nations."
In a barb apparently aimed at the United States, he said countries should not use Russia's World Trade Organisation membership negotiations as a vehicle to make unrelated demands.
"The negotiations for letting Russia into the WTO should not become a bargaining chip for questions that have nothing in common with the activities of this organisation," Putin said.
Russia has signed agreements with the European Union, China and Japan, among others, but has yet to reach deals with the United States, Colombia and Australia. In March, Putin expressed frustration at the pace of negotiations, accusing the US of coming up with ungrounded demands that were hindering talks.
One of the persistent obstacles to Russia's WTO membership has been its poor record on combating the production and sale of pirated goods. "It is our obligation" to protect copyrights, Putin said.
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