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Russia Report: December 20, 2007

New Prince, New Dangers

By Robert Coalson

The loyal son

The announcement of President Vladimir Putin's heir apparent was awaited with an anticipation comparable with what accompanies word that the king has finally produced a son.

When Putin announced yesterday that he supports First Deputy Prime Minister Dmitry Medvedev to succeed him next March, the country's bureaucratic and political elites fell over themselves to be among the first to affirm their loyalty to the newborn prince. But the outward show of unity does not mean the transition problem is resolved.

Putin took some pains to make the anointing seem like a consensus-building process. He met with the leaders of four pro-Kremlin parties, all of which agreed to nominate Medvedev. However, by doing so, he undermined even loyal supporters such as St. Petersburg Governor Valentina Matviyenko, who was widely quoted the day after the December 2 Duma elections as saying she hoped Unified Russia would nominate its candidate in an open process, taking into consideration the opinions of party members, rather than through some "backroom" negotiations.

The Communists were quick to see through the charade. "What kind of parties are these," Communist official Ivan Melnikov was quoted on December 11 as saying, "if the decision about what candidate to nominate is made at some sort of 'consultative meeting' and not at a party congress, taking into consideration the opinions of party members?"

The "backroom" process compelled pro-Kremlin figures to resort to the most elaborate verbal contortions in order to make the unfolding medieval scenario appear like the next step in Russia's march toward its own form of democracy. "Each of the parties, in its own way, is realizing its political program by supporting a single candidate," A Just Russia official Aleksandr Babkin said on December 11. "And this shows how the political system in Russia is maturing, and we now have the chance to make consolidated decisions, despite our differences."

But the campaign to have Putin named "national leader," calls for some sort of national assembly to confer supreme-leader status on Putin, the primitive cult of personality forming around him, and other features of the current political environment belie any argument that Russia's political system is maturing.

The appearance of a prince does not mean that Russia's perilous managed transition has been completed. In fact, that transition now enters its most dangerous phase. Four political parties have endorsed Medvedev, but political parties -- even the mighty Unified Russia -- have no importance in the political system that has emerged under Putin. It is the votes of Putin and his inner circle of "chekisty" that count, and only time will tell whether Medvedev can overcome any intra-elite resistance he may encounter.

Back To The Middle Ages

In the early medieval period, it took Russia several centuries to establish the principle of direct royal succession. For generations, the death of a ruler led to brutal, open warfare either between the ruler's children, on the one hand, and his brothers, on the other, or among the ruler's children from different wives. Notably, the deceased ruler's stated preference for an heir rarely did much to prevent these conflicts.

There is already considerable evidence that the powerful "uncles" in Putin's inner circle -- figures such as deputy presidential administration head Igor Sechin, Rostekhnologia head Sergei Chemezov, Federal Security Service Director Nikolai Patrushev, and Federal Antinarcotics Service head Viktor Cherkesov -- have been butting heads as the succession issue lingered in the air. At the same time, there is little evidence that they have rallied, or will rally, around the princeling Medvedev, even with Putin's seal of approval.

Complicating Medvedev's task is Putin himself. Although Russia appears to have a new king, the old one is far from dead. In fact, the decidedly uncharismatic Medvedev was almost certainly chosen in part because there is no danger that he could ever overshadow Putin. Putin has said he has no intention of retiring from the political scene and that he expects to wield influence beyond the March 2008 election.

On his first day as prince, Medvedev appeared on television to appeal to Putin to serve as his prime minister if he is elected. With Unified Russia and its constitutional majority in the Duma behind him, to say nothing of Putin-oriented organizations like For Putin! and Nashi, Putin will remain a force with which Medvedev must contend. In addition, Putin has formulated a number of key domestic programs, especially economic-development plans, with a time frame through 2020, meaning that Medvedev will be additionally constrained on the level of policy.

Although this short leash is no doubt intended to mollify the "uncles" and reassure them that this change is really no change at all, it could serve to weaken Medvedev to the point that they feel even more emboldened to attack him. It is widely believed that most of them favored a third term for Putin and that some have been making efforts to compel Putin to stay on. As prime minister, Putin would become acting president if Medvedev resigns or is forced from office.

"Putin will maintain his influence, and while Medvedev is entering into his new role, [Putin] will watch and see how Medvedev manages to build consensus within the elite," analyst Dmitry Badovsky told on December 11. "And then he will decide if Medvedev is succeeding or not. If not, Putin will come back."

Russia also has a time-honored tradition of strong leaders killing off their heirs -- either literally or metaphorically. Ivan the Terrible and Peter the Great both killed their own sons. On the other hand, Russian history offers few examples of successful tandem leadership along the lines of the Medvedev-Putin model currently being floated.

Russia's current political transition has moved a step forward with the appearance of an heir. But the drama is far from being played out.

Putin's 'Younger Brother' Takes Center Stage

By Chloe Arnold

Dmitry Medvedev is seen as an intellectual who shuns political labels

MOSCOW -- All his life, Dmitry Medvedev has worked hard. Former teachers remember a trip to a collective farm when the teenage Dmitry was a member of the Komsomol, the communist youth league.

As the other students lounged about, laughing and joking, Medvedev picked up a spade and started digging for potatoes, not stopping until there were enough for everyone. “He was good company,” the teacher recalls.

That hard work appears to have paid off. On December 10, Russian President Vladimir Putin endorsed the 42-year-old lawyer as the preferred presidential candidate for four political parties, including his own Unified Russia. Putin’s own enormous popularity means anyone he anoints as his successor is almost guaranteed a win in next year’s election.

Throughout the course of his working relationship with Putin, dating back almost two decades, Medvedev has risen from university lecturer to regional policy adviser to election campaign manager to first deputy prime minister.

Born the only son of university lecturers in St. Petersburg in 1965, Medvedev long intended to follow his parents’ path into academia. He completed his doctorate in 1990 and began teaching law at Leningrad State University.

A year later he was invited to join the St. Petersburg regional administration as an adviser to the foreign relations committee -- then run by a young man named Vladimir Putin. The two men formed a bond that would last through years of close cooperation.

In 1999, Medvedev moved to Moscow, and the following year, he was selected by Putin to run his election campaign. After he was sworn in as president, Putin promoted Medvedev to deputy chief of staff at the Kremlin and soon afterward awarded him the top job in the country’s thriving energy sector -- the chairmanship of Gazprom.

All Thanks To Putin

For Yevgeny Volk, the director of the Moscow office of the Heritage Foundation, Putin’s endorsement of Medvedev makes perfect sense. “This is a man who grew up, entered politics, and rose to the highest echelons of power, all thanks to Putin,” Volk said.

According to Volk, Medvedev sees Putin "as an older brother. That’s very logical. And Putin sees Medvedev as a younger brother, whom he can trust as his successor in running the country. His entire life is indebted to Putin.”

But though Putin appeared to have no doubts about the soft-spoken lawyer, Medvedev wasn’t well-known outside Kremlin circles until recently. In 2005, Putin raised his profile by putting him in charge of the government’s social projects, including health care, education, housing, agriculture, and trying to reverse the slump in Russia’s birthrate.

State-controlled television showed the energetic Medvedev jet-setting around the country, drinking tea with pensioners, and cradling babies in gleaming new birthing centers.

But that role didn’t necessarily help him: birthrates are continuing to fall, property prices have soared, and a recent poll found that the majority of Russians feel that most of the money intended for social projects is being stolen by government officials.

Konstantin Sonin, an economic expert and commentator for the “Vedomosti” and "The Moscow Times" newspapers, says many Russians are cautious about Putin’s heir apparent.

“He’s not naturally likeable; he doesn’t have the natural ability to connect to people as President Putin does," Sonin said. "There is no general admiration. I think he is a person who has yet to be tested. His main test will be the ability to connect to people, which will be absolutely necessary for his new job.”

Smooth Handover

But others say Medvedev is starting with a clean slate. He is one of the few members of Putin’s inner circle who has no known ties to the KGB or its successor, the Federal Security Service. He calls himself a "European," advocates a free-market economy for Russia, and dislikes political labels -- including the term "sovereign democracy," coined by another Putin adviser to describe Russia’s unique political path.

He also appears to share Putin’s vision of a smooth handover of power next year, at whatever cost. “It is the task of any government to make sure that the handover of power is absolutely painless for the people in the country and for the economy," Medvedev told RFE/RL’s Russian Service at the St. Petersburg Economic Forum earlier this year. "It is perhaps the most important mission of the government to ensure continuity -- continuity in the most traditional, democratic meaning of the word.”

The question for most Kremlin-watchers is not whether Medvedev will become president next year, but what happens next. Putin has hinted that he will remain in power behind the scenes after his two terms as president run out in March. Medvedev appeared to lay the ground for such a move today, saying he would like to see Putin become prime minister in a future government.

But Yevgeny Volk is wary, and warns that Medvedev, as president, "will gain enormous political power." “The Russian president has enormous powers according to the constitution. And Putin, thanks to, let’s call it, a favorable political and economic situation, managed to extend them even further. He canceled elections for regional governors [and] took control of the media," Volk said.

And despite 17 years of friendship, this might mean Medvedev eventually takes a different path from that of his political mentor and "big brother," according to Volk. “Whether he maintains his absolute loyalty to Putin or starts to change, that’s a very serious question. Because in politics, there cannot be absolute loyalty. Situations change, promises are broken. People in power also change,” he said.

U.S. Magazine Marks Putin's 'Grand Bargain'

By RFE/RL analyst Robert Coalson

Russian President Vladimir Putin

The announcement that "Time" magazine has named Russian President Vladimir Putin its person of the year will come as little surprise to most Russians. "They say that Putin is the most successful figure of the 20th century," academic Leonid Polyakov told a roundtable in September. "I would pose the issue more broadly: Who in history has been more successful than him? Who accumulated such a potential of confidence after being in power just eight years?"

Or, as former First Deputy Duma Speaker Lyubov Sliska put it more succinctly in May: "Putin is our everything."

The newsweekly's editors are careful to note that the distinction "is not and never has been an honor." "It is not an endorsement," they continue. "It is not a popularity contest. At its best, it is a clear-eyed recognition of the world as it is and of the most powerful individuals and forces shaping that world -- for better or worse." They correctly note that Putin's achievements have come "at significant cost to the principles and ideas that free nations prize" and that it is far from clear whether "he proves to be a reformer or an autocrat who takes Russia back to an era of repression."

And perusing the magazine's list of also-rans, including former U.S. Vice President Al Gore and British author J. K. Rowling, it is hard to argue that Putin does not deserve the recognition.

New Rules

In its appraisal of Putin, "Time" argues that he has brought Russia out of the chaos of the 1990s to a new stability from which most Russians are benefiting. "In his eight years as president, he has guided his nation through a remarkable transformation," the article contends. "He has restored stability and a sense of pride among citizens who, after years of Soviet stagnation, rode the heartbreaking roller coaster of raised and dashed expectations when [Soviet leader Mikhail] Gorbachev and then [Russian President Boris] Yeltsin were in charge. A basket case in the 1990s, Russia's economy has grown an average of 7 percent a year for the past five years. The country has paid off a foreign debt that once neared $200 billion. Russia's rich have gotten richer, often obscenely so. But the poor are doing better too: workers' salaries have more than doubled since 2003."

Although "Time" argues that this economic miracle is "partly a result" of high global energy prices, it would be more accurate to say that Putin has been phenomenally lucky that throughout his presidency revenues have flowed in at rates several times greater than the most optimistic projections of 2000. His greatest achievement in this regard has been that he bullied the Yeltsin-era oligarchs into accepting "new rules of the game," which included diverting most of the profits from high energy prices into the government's Stabilization Fund. That fund now contains some $150 billion -- even after being used, as "Time" notes, to pay off Russia's astronomical foreign debt.

Putin's other achievement in this regard has been that he placed capable economists, including Finance Minister Aleksei Kudrin and former Economic Development and Trade Minister German Gref, in charge of these assets, which so far has prevented them from being pillaged. In recent months, however, Gref has been removed from the cabinet and Kudrin has come under fierce attack from the siloviki -- people with ties to the military and security services -- in Putin's inner circle. In February, the Stabilization Fund is to be split into two new funds and the battle to spend those billions will be fierce, possibly to the point of rocking the "stability" for which Putin traded Russia's freedoms.

Many observers have argued that the energy-price windfall has encouraged Russia to put off major reforms and investments that are needed to create truly stable economic development. In the early years of Putin's presidency, he pushed through liberal and much-hailed tax and customs codes and rationalized many Soviet-era economic policies. But in recent years there has been little to boast of. The so-called national projects to improve agriculture, housing, education, and health care (projects that have been overseen by Putin's anointed successor, First Deputy Prime Minister Dmitry Medvedev) have yielded few results and have been attacked as bottomless money pits. Although energy exports account for more than half of Russia's state revenues, production is stagnant. During Putin's second term, old state-dominated monopolies have grown and new ones have been created, increasing the opacity of the economy and placing a premium on political ties and cronyism over sound management and innovation.

'Can Putin Really Be Wrong?'

"Time" writes that Putin established stability through authoritarian domestic policies. "His government has shut down TV stations and newspapers, jailed businessmen whose wealth and influence challenged the Kremlin's hold on power, defanged opposition political parties and arrested those who confront his rule," the magazine's appraisal notes. Kremlin-connected political analyst Sergei Markov perhaps put it better during a conference in August: "The personality of Vladimir Putin is more important to society than institutions of state." Or, to quote Central Election Commission Chairman Vladimir Churov, "Can Putin really be wrong?"

A key result of Putin's draconian domestic policies has been the elimination of all oversight and a consequent flourishing of corruption. To take one example, a study in October found that the country loses some $40 billion a year just on state purchases. Recently a Kremlin-connected businessman told "Kommersant" how the siloviki, led by deputy presidential-administration head Igor Sechin, are raiding lucrative private businesses by making them offers they can't refuse. "This isn't raiding," he said. "We don't take over enterprises -- we minimize their market value using various means. As a rule, these are voluntary-compulsory means. But, as a rule, people understand where we are coming from."

Former Duma Deputy Anatoly Yermolin, himself a retired Federal Security Service (FSB) colonel, told "Novoye vremya" earlier this month: "Putin is not fighting against corruption. He is using it to control the country." He added that "the genius of Putin's management of the country is that the president and his team have turned the main weakness of Russian state management -- corruption -- into its greatest strength."

During his interview with Putin, the "Time" correspondent asked about the corruption problem and received a "testy" response from the president. "If you are so confident, then I presume you know the names and the systems and the tools.... Write to us," Putin said. In a country with no independent law enforcement agencies and no legislative oversight, one that has virtually no independent media and no functioning NGOs, finding out "the names and the systems and the tools" is no easy task.

Although it is no "honor," "endorsement," or "popularity contest," Putin has clearly earned the distinction of person of the year. But it remains to be seen if he really has carried out a "grand bargain" of freedom for stability. The freedoms are gone, but the promised stability -- as the country's current political transition suggests -- seems far from certain. To use analyst Markov's phrase: Can a country where "the personality of Vladimir Putin is more important to society than institutions of state" really ultimately be stable?

Putin's Plan To Become 'Father Of A New Country'

By RFE/RL analyst Victor Yasmann

Vladimir Putin (file photo)

Many observers of Russia are puzzled as to why President Vladimir Putin went to such bizarre lengths to turn the country's recent legislative elections into a "national referendum" on his own rule.

After all, Putin completely dominates the political stage, and he could have easily initiated and passed any changes to the constitution needed for him to run for another term as president. His oft-repeated assertions that he respects the letter and the spirit of the current constitution ring hollow, given Kremlin policies like the restriction of opposition political parties, strictures on civil society, suppression of nonstate media, subordination of the judicial system, and abolition of the direct election of regional administration heads.

Even most foreign observers -- while noting the unfair nature of the Duma elections and the myriad ways the Kremlin misused its power against weak political opponents -- have never really doubted the outright victory of the pro-Putin forces.

That victory was never in doubt because Putin is genuinely popular, for a mixture of objective and subjective reasons. Because of the vast revenues Russia accrues due to high global energy prices, the standard of living for many Russians is improving markedly -- and most of them attribute that prosperity to Putin personally. Putin has also hijacked populist policies from both the right and left ends of the spectrum. Borrowing from the left, he has increased pensions and state aid programs. From the right, Putin adopted the policy of a sharp reduction of business taxes and a low, flat-rate income tax for individuals. Finally, Putin's efforts to restore Russia's standing as a power in the international arena is enormously popular among Russians, many of whom remain bitter about the economic hardships and foreign-policy weakness of the 1990s. The yearning for a restoration of Russia's prestige is expressed throughout society, in areas as diverse as sports and the arts. This feeling has saturated the atmosphere because of the Kremlin's skillful manipulation.

A career intelligence officer, Putin has taken considerable pains to conceal his plans. It has become commonplace to say that Russian policy under Putin has become a series of "special operations." This secrecy is simply a part of the mindset of Putin and the siloviki -- people associated with the security organs and the military -- who surround him.

Questions Raised

Until mid-December, there was evidence that Putin was having trouble choosing a successor for when his current term expires in March 2008. His anointing of First Deputy Prime Minister Dmitry Medvedev does not necessarily make things simpler. Many believed the successor should come from among the siloviki who form Putin's inner circle, or at least be acceptable to them. It is unclear how Medvedev, who does not come from the ranks of the siloviki, will hold up. Moreover, because these siloviki are divided among themselves, it's unclear there is even such a thing as a candidate acceptable to all factions -- one who will be recognized as the supreme commander by the entire military and security community. Putin must also keep in mind that Russia is the world's second most powerful nuclear power and Medvedev, if he remains the successor of choice, must be an acceptable and predictable partner for the international community, particularly the United States.

Some clues about Putin's intentions can be found in an 800-page manifesto issued last summer by a group of about 70 pro-Putin, national-patriotic academics under the title "Russian Doctrine." The book is presented as a set of "guidelines" for the next administration and a kind of national, supra-party platform. It contains detailed foreign- and domestic-policy proposals, including autocratic reforms to the military, national-security system, the economy, the mass media, education, and culture.

Moreover, it was approved at the September World Congress of Russian People, an annual event sponsored by the Kremlin and the Russian Orthodox Church. Metropolitan Kirill, who handles foreign relations for the Moscow Patriarchate and is one of the leading ideologues of the Putin regime, took pains to praise it.

The "Russian Doctrine" presumes that the Russian Federation is doomed to extinction because it will be unable to cope with the looming challenges of international competition. Within the next decade, the authors claim, Russia will increasingly begin to lag behind China, India, the United States, and some Southeast Asian countries. In response, the authors propose a new state structure based on the traditions of the Russian Empire and the Soviet Union. Interestingly, they propose doing so without dissolving the Russian Federation: that is, they urge the creation of a "parallel state" initially operating unseen behind the facade of the current one. It would consist of a system of political and economic institutions accessible only to Putin and the siloviki that the authors call "the invisible, networked Russia."

However, on closer inspection, the model described in "Russian Doctrine" resembles neither tsarist Russia nor the Soviet Union so much as it does the sociopolitical structures of Germany, Italy, Spain, and Portugal in the 1930s.

Parallel Institutions

It isn't hard to find examples of the sort of parallel institutions the authors describe in the policies enacted during Putin's two terms as president. In 2005, he created the Public Chamber, a pseudo-public, estate-based organ similar to ones that existed in parallel to the legislatures of the countries mentioned above. More importantly, the Kremlin has been actively creating state megacorporations in key sectors of the economy, including energy, nuclear power, aviation, shipbuilding, and nanotechnology. The number of these new entities has mushroomed in the last few years, most of them being headed by siloviki from Putin's inner circle.

In December, the finishing touches were put on Rostekhnologia, a conglomerate based on the arms-export monopoly Rosoboroneksport and including virtually all weapons producers and traders, as well as machine-building firms and the giant carmaker AvtoVAZ. Rostekhnologia is headed by Sergei Chemezov, a KGB colleague from Putin's days in Dresden, East Germany. The doctrine of a corporate state also has its roots in the political climate of 1930s Europe.

In addition, during the Duma campaign, Kremlin-inspired activists energetically promoted the idea of Putin as "national leader" after he leaves the presidency. Analysts have speculated that Putin could play a role in Russia similar to that played by former South African President Nelson Mandela or former Chinese leader Deng Xiaoping after their retirement. But in combination with the emerging corporate state, a national leader would seem more like Italy's Il Duce, Benito Mussolini, or Spain's Caudillo, Francisco Franco. Russian ideologists have been compelled to adopt the English-based word "lider" since the Russian "vozhd" is strongly associated with Vladimir Lenin and Josef Stalin.

Using its hegemony over Russian culture and information, the Kremlin has been able to infuse the national consciousness with the idea of a renewed imperial state. Maksim Kalashnikov, one of the authors of the "Russian Doctrine" project and a leading proponent of new-empire thinking, has written that nothing better reflects the aspirations of a national elite than a country's science fiction books. "Today most of our science fiction is revanchist, imperial literature in which Russians are redeeming their shame [from the 1990s] and building up a new superpower," he wrote.

Two Russias

The phenomenon has not escaped the attention of Russia's neighbors. The Ukrainian website wrote recently that there are two Russias -- a proto-imperial Russia inside the country and a regular country from the outside. Igor Panarin, a Russian expert on information wars and a proponent of the new imperialism, told the website: "Inside the country, in the virtual world, such an empire is, indeed, being created. This is very good and it is to the credit of the current president. The next goal is to expand this public relations campaign beyond Russia's borders."

In 2006, neo-imperialist author Mikhail Yuriev published a science fiction utopia called "The Third Empire," in which the action is set in 2053. In Yuriev's vision, the world then will be covered by five super states -- India, China, the American Federation (comprising North and South America), an Islamic caliphate, and the Russian Empire. The latter includes all of Russia and the former Soviet republics and also sweeps all the way across Western Europe and even encompasses Greenland. In the text, Yuriev describes how Russia conquered Europe and Turkey in a series of "expansionist wars."

Although Yuriev's vision is fantastic, it is not completely divorced from reality. In early 2007, the Economic Development and Trade Ministry published a report on Russia's economic development through 2020. The report contained an optimistic, a neutral, and a pessimistic forecast. Under the optimistic forecast, Russia would emerge as one of the world's 10 most-developed countries by the end of the period. However, according to press reports, Putin ordered the neutral and pessimistic scenarios removed and made the optimistic scenario even rosier. Under Putin's vision, by 2020 Russia will be among the world's top five most-developed countries, on a par with the United States, China, India, and Japan. In short, Russia would be the most advanced country in Europe, state television commented recently.

If Putin is indeed following a plan along the lines of the "Russian Doctrine," then perhaps some of his next moves can be anticipated as he leaves office and focuses on the creation of a new political infrastructure and networks. The new president, a handpicked loyalist, might undertake a large-scale purge of the 1990s elite from the state apparatus, the mass media, and other positions of power. The "Russian Doctrine" identifies this as a top priority.

Speaking to RFE/RL on December 1, liberal economist Andrei Illarionov mentioned his concern that the new president might launch mass repressions, including some that touch the security apparatus. The new president might also be called upon to implement other reforms that are expected to meet with resistance at home and abroad, including the possible reform of the territorial-administrative divisions of the Russian Federation. Regional Development Minister Dmitry Kozak has already drawn up a plan to divide the country up into several "macroeconomic regions." Kozak told reporters last week that the plan covers the period through 2020 and "will be a leap forward in the development of various territories."

Then, after this dirty work has been done, a new draft constitution, based on "conservative values," can be introduced. Under it a new schedule of elections will be laid out and Putin can return to the Kremlin in glory, the father of a new country.

But to implement this plan, Putin needs to be sure that he has more legitimacy than his successor. That's why he turned the Duma elections into a personal referendum. Taken together, Unified Russia and A Just Russia pulled in more than 70 percent of the vote. Since the president elected in March will be unlikely to get much more than 50 percent of the vote, Putin will have an important "legitimacy edge." With Medvedev's call for Putin to step in as a future prime minister, the plan would appear to be well under way.