Medvedev pitches modern Russia, warns opposition

By Guy Faulconbridge

MOSCOW (Reuters) - President Dmitry Medvedev said on Thursday Russia needed to embrace sweeping reforms to become a modern world power but warned the opposition against sowing chaos in the name of democracy.

Medvedev spent much of his 100-minute state of the nation speech bewailing the state of Russia's economy which the Kremlin chief said was chronically obsolete and mired in corruption.

Amid a blizzard of general themes, Medvedev gave few concrete details on how to move Russia away from its Soviet roots and reduce "humiliating" dependence on raw materials.

"At the heart of my view of the future is the conviction about the necessity and ability of Russia to achieve the status of a world power on a completely new basis," Medvedev told the political elite gathered in the Grand Kremlin Palace.

"The nation's prestige and prosperity cannot be upheld forever by the achievements of the past," Medvedev said, referring to Russia's Soviet legacy of nuclear weapons, infrastructure and oil and gas production.

Prime Minister Vladimir Putin, Medvedev's mentor and the country's most powerful politician, watched from the front row flanked by his key lieutenants as the president spoke. The audience gave Putin a standing ovation when he entered.

After offering modest pledges to boost democracy in Russia, Medvedev warned the opposition against any attempt to sow disorder under the cover of democratic slogans.

"The strengthening of democracy does not mean the weakening of law and order," Medvedev said. "Any attempts to rock the situation with democratic slogans, to destabilize the state and split society will be stopped."

Russia's fragmented opposition dismissed Medvedev's promises of reform and said Medvedev had failed to address concerns about electoral fraud after last month's disputed regional elections.

Medvedev, who has ruled the Kremlin since May 2008, said that an upsurge of violence in the North Caucasus had become the country's single biggest domestic problem.

The patchwork of republics along Russia's southern flank have seen a wave of attacks in recent months that local leaders say are fueled by a potent mixture of clan feuds, poverty, Islamism and heavy-handed tactics by law enforcement agencies.

WISHFUL THINKING?

Medvedev said Russia's economy had been more badly hit by the global economic crisis than many other countries, a trend he said proved the need to bring Russia into the 21st century.

"We haven't managed to get rid of the primitive structure of our economy, the humiliating raw materials dependence," said Medvedev, who read from notes for most of the speech.

Medvedev called for Russia to boost the share of locally produced medicines to half the market by 2020, cut gas flaring dramatically by 2012 and launch broadband internet and digital TV nationwide in five years.