President Putin has warned his people in a sober state-of-the-nation address that years of hard work lie ahead to rebuild their shattered economy.
Underscoring his commitment to liberal reforms, he said his first year in office had brought "stability" to Russia, but the hard work of pulling the country out of poverty was still to come.
"So far we only have relative economic stability", he said, in a speech high on reformist zeal, but lacking policy detail. "It will take many years of heavy labour. Reforms are to be deep."
The speech caps a year of much upheaval since he took over the reins of power from former Boris Yeltsin. Power has been concentrated in the Kremlin, regional governors and some rich tycoons have had their wings clipped, and ambitious tax-reform plans have been initiated.
Mr Putin said reform was being frustrated by his own bureaucrats who "put pressure on business, strangling business initiative and activity". Paradoxically, he told Russians that they would have both stability and upheaval.
Upheaval was needed to haul the country out of its poverty, but the turmoil of the last 10 years since the end of Communism was a thing of the past. "I think it is time firmly to say this cycle is over. There will be no more revolution, no more counter-revolution," he said.
His focus was on economics. Mr Putin made no mention of the US, with which relations have grown increasingly frosty in recent weeks, and said he wanted closer ties with the EU.
He also promised that troops would soon be withdrawn from Chechnya, although such statements have been made at regular intervals in the last few months, and fighting continues in the province.
Mr Putin, a former KGB officer, insisted he was an economic liberal, promising legal reforms, greater transparency in business and privatisation of state industry.
The speech comes a week after he made a surprise cabinet reshuffle, appointing ultra-loyalists to the key posts of defence and interior minister. And he left Russians in no doubt as to his determination, saying: "We need to serve our state. This is our key task, I'd like to repeat once again."
While still in the economic doldrums, Russia's economy has enjoyed 7 per cent growth in the last year, much of it due to bumper tax revenues from the high world oil price. Mr Putin is enjoying 75 per cent approval ratings, with many Russians convinced he is a "firm hand" on the wheel after years of chaos under Mr Yeltsin.
He called on state organs to make citizens' interests their priority. "The essence of many of our problems is a lack of confidence in the state, which has betrayed its citizens so many times," he said.
After a speech lacking detail, reaction was muted, with most adopting a wait-and-see attitude. "His proposals are realistic. It is a careful, almost tentative type of reform," said Mr Boris Nemtsov, a leading official of the centre-right Union of Right Forces.