The 3rd most powerful person in the world according to Forbes magazine – Vladimir Putin’s address will be monitored closely for signs of the future direction of Russian economic and foreign policy.

Given the country's dependence on the rest of the world for the success of it's economic life, in particular on prices for natural resources, there's only so much Moscow can do. But one of the major problems that can be addressed locally, is corruption – which has been cited by all the most powerful people in this country as standing in the way of progress. Aleksey Moiseev, Chief Economist, at Renaissance Capital says it erodes the administration from within.

“Corruption probably is the biggest threat to the Russian economy and Russian state in general. At some point corruption is like cancer and paralyses the ability of the civil service to react to the messages from the very top. It's not only the civil society concerned about corruption but the PM and President should because their orders go unnoticed by operatives because they are more concerned about their corruption interest rather than fulfilling their obligations.”

Hopes to create a more innovative society, which the government has made priority, are also being stifled by graft. New laws have been introduced and promises made, but so far it's all bark and no bite. Russia's economy has slid into deficit and been forced to spend its reserves on anti-crisis measures. And while it may not be the best time to turn towards an innovation based economy, the last 18 months have underlined why it is necessary.