POLITICAL REFORMS

When speaking about reform of the country's political system, Medvedev was more detailed.

He said "comprehensive" reform is needed, including easing registration rules for political parties, the introduction of new ways to fight corruption, and the restoration of direct elections of regional governors, which was scrapped by then-President Vladimir Putin in 2004.

Medvedev also called for further restrictions on deals between government and commercial bodies where the company leaders are relatives of state officials.

All of those reforms, Medvedev said, are aimed at "giving active citizens a legal chance to political life."

Local experts said those words targeted Russia's middle class, which Medvedev considers to be his social base.

"Not surprisingly, the program of political reforms Medvedev proposed in the address was also aimed to increase the middle class' participation in domestic politics," Markov said.

Markov noted that the outgoing president can now afford to speak his mind more openly.

"He talked about restrictions on fat cats and restoration of direct governor elections. By this way, Medvedev hinted that he has heard these demands and was going to stay active in the political life to push the changes," Markov said.

Among political topics, Medvedev touched on rallies that followed the December 4 parliamentary elections, saying the protests have proven the development of Russia's democracy.

"People are changing and becoming more proactive in expressing their positions and making new demands to the authorities. This is a good sign, which means our democracy is becoming more mature," the president said.

At the same time, Medvedev stressed that Russia needs democracy, not chaos, and that the country will not accept any foreign interference in its internal affairs.

Yevgeny Minchenko, director of the International Institute of Political Analysis, said the president's remarks could be seen as a weak answer to the protests.

"I think the comments are intended to soften up the protesters and to tell them 'We hear you.' That's wonderful, however, we would all like to hear more concrete details," Minchenko said.