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Russia on the road to modernisation

President Vladimir Putin’s choice of First Deputy Prime Minister Dmitry Medvedev as his favoured successor signals a new phase in Russia’s transition from a communist state to a market democracy.

During his eight-year presidency, Mr. Putin has pulled Russia together after the chaotic meltdown during his predecessor Boris Yeltsin’s two terms. He crushed Islamist separatists in Chechnya, reasserted the Centre’s authority over other regions, set the country firmly on the road to economic revival and restored Russia’s stature as a global power. Mr. Putin has acted with a firm resolve to strengthen the state. He cut to size predatory Yeltsin-era oligarchs, cancelled direct elections of regional governors, re-imposed state control over energy and other strategic sectors, and re-nationalised federal television channels.

Mr. Putin’s reforms have prepared Russia for the next stage of modernisation that Mr. Medvedev will be responsible for. His elevation brings a post-Soviet generation to power for the first time. At 42, Mr. Medvedev will be the youngest leader Russia has ever had in its modern history. Mr. Putin was 47 when he became President. A great fan of hard rock and recognised authority on Roman law, Mr. Medvedev has a background that is totally different from Soviet-trained bureaucrats. He was still a law student at St. Petersburg state university when Mikhail Gorbachev launched perestroika, and has made his entire career in the post-Soviet era.

Mr. Medvedev comes from the Kremlin’s liberal wing. At the World Economic Forum in Davos this year, where Mr. Medvedev made his international debut, he asserted his credo as a liberal reformer and moderate nationalist.

“We are well aware that no undemocratic state has ever become truly prosperous for one simple reason: freedom is better than non-freedom,” he said addressing world leaders and business tycoons in English. “In the 21st century, we see Russia as a developed country with strong economy and as a reliable trade and political partner,” he said adding a stern warning to the West: “We aren’t trying to push anyone to love Russia, but we won’t allow anyone to hurt Russia.”

Mr. Medvedev’s task will be to take Russia along the road of a socially oriented market economy and liberal political reforms. He has indicated that higher living standards will be the top priority of his presidency.

“The [economic] successes achieved in the past eight years must now be converted into credible social programmes,” Mr. Medvedev told his supporters in Parliament ahead of his official nomination by the United Russia party on December 17. Earlier, he called for developing an independent judicial system; rapid expansion of small and medium-sized businesses; improved business climate, including a “sensible” tax regime and stable property rights; and eventual diminishing of the state’s role in the economy.

“Traditional state capitalism is a dead end for developing the economy,” he said. “State-owned companies cannot ensure the growth of small and medium-sized businesses on their own. And this is the basis of any economy, the basis for civil society.”

The Russian market has applauded Mr. Medvedev’s nomination sending stock indices to record-high levels.

“By supporting Mr. Medvedev, Mr. Putin has made a choice in favour of a major shift towards reforms based on liberal-conservative rather than state-administrative values,” said president of the influential Russian Union of Industrialists and Entrepreneurs Alexander Shokhin.

Despite his young age, Mr. Medvedev is far better prepared for presidency than Mr. Putin was when President Yeltsin plucked him from virtual obscurity. For the past seven years, he has combined his work in the Kremlin with chairmanship of the natural gas giant Gazprom. He has helped transform the behemoth monopoly that functioned like a Soviet-era ministry into a Western-type corporation.

Mr. Medvedev has all the makings to become as strong a President as Mr. Putin. He has displayed a combination of ruthlessness and diplomacy in waging “energy wars” with former Soviet republics over higher gas prices and in wresting control of Sakhalin-2 and the Kovykta gas field from Western energy companies. Two years ago, Mr. Putin appointed Mr. Medvedev First Deputy Prime Minister in-charge of five federal social programmes intended to address Russia’s ills in the spheres of health, education, housing, food production, and demography. The work has fully exposed Mr. Medvedev to the low efficiency of the Russian bureaucracy and the inadequacy of legislation.

Mr. Medvedev is an ideal choice of successor to implement Mr. Putin’s grand plan for strategic integration with Europe. Despite Russia’s steadily growing economic ties with Europe, its leaders have treated Mr. Putin as an alien — an authoritarian ruler with a KGB secret service background. Mr. Medvedev with his liberal views, English skills, easy-going manner and no links with security agencies, is well positioned to win greater acceptance in the West. He has repeatedly asserted Russia’s “European identity” and his preference for “a normal full-fledged multiparty system.”

“We subscribe to universal values, to the supremacy of private property and human rights. We want to be a full-fledged member of the European family,” Mr. Medvedev said in one of his rare interviews.

Mr. Medvedev becoming Russia’s next President will mean stability and continuity of domestic and foreign policies. As he announced his support for Mr. Medvedev, Mr. Putin stressed that the would-be President was his close ally who had stood by his side for the past 17 years and who would continue his course after Mr. Putin steps down next year in line with a constitutional ban on heads of state serving more than two consecutive terms.

Mr. Medvedev lost no time in reaffirming his loyalty to Mr. Putin by asking him to become Prime Minister after the March 2 presidential poll. It is unlikely that Mr. Putin will accept the invitation. Speaking at a Russia-European Union summit in Lisbon in October, he explicitly rejected the option: “And if anyone thinks that I intend to take over the government and shift major powers there, they are mistaken,” Mr. Putin told a post-summit press conference.

Mr. Putin’s premiership under President Medvedev is fraught with the risk of conflict and instability, as it would create two centres of power. Prime Minister is number two in the Russian hierarchy, but if Mr. Putin takes the job President Medvedev will be junior to him.

Mr. Medvedev’s offer of premiership to Mr. Putin served three immediate purposes. First, it was designed to help boost the presidential candidate’s popularity. The same pre-election technology worked in the parliamentary poll held on December 2. United Russia captured over 64 per cent of the votes in large measure thanks to the hugely popular President’s presence on the top of its candidates list. Mr. Medvedev’s message to the electorate is that his close association with Mr. Putin will continue after the presidential poll. This should allow Mr. Medvedev to win in the first round no matter how many other candidates run against him.

Secondly, Mr. Medvedev sought to reassure the Russian elites that there would be no major government reshuffles. Mr. Putin’s support for his candidacy signalled a defeat for the so-called “silovili” clan of acting and former security officials, who were opposed to Mr. Medvedev’s nomination. This threatens to upset a precarious balance Mr. Putin has maintained between rival clans in the Kremlin. Mr. Medvedev has now told the “siloviki” that they need not worry.

“It is important to keep the effectiveness of the team created by the incumbent President,” Mr. Medvedev said in his televised address to Mr. Putin to accept the post of Prime Minister.

Thirdly, by indicating his preference for Mr. Putin as Prime Minister, Mr. Medvedev has effectively postponed the need to reveal his actual choice for premier probably till after the presidential poll. Mr. Medvedev’s offer was also a gesture of respect for Mr. Putin whom he always saw as his mentor and superior.

“Mr. Medvedev’s personality was shaped under Mr. Putin’s strong influence, and he worships Mr. Putin like a father figure, or at least like an older brother,” recalled Mr. Medvedev’s former academic adviser at Leningrad State University Valery Musin.

One cannot rule out Mr. Putin becoming Prime Minister. But this is rather a fallback option if the turf war between rival Kremlin clans escalates and the new President needs help before he gets the situation under control. Otherwise, Mr. Putin may choose to head the ruling party, United Russia, which will enable him to continue to dominate Russian politics through control of Parliament.

Whatever Mr. Putin’s future role, he will work in close tandem with the new President. He and Mr. Medvedev share the same long-term vision for Russia as a strong diversified economy, multiparty democracy and global power.

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