Russian President Dmitry Medvedev still looks as if he is busy putting political water between himself and his Prime Minister Vladimir Putin. However, judging by his state of the nation address, the water is neither yet clear nor blue.
He repeated his past concerns at Russia’s corrupt and ineffective economy, not least the state-run industrial behemoths that re-emerged under President Putin, its still Soviet-style social structures and its weak democracy. He also proposed the country move away from excessive reliance on natural resources and turn itself into a high-technology innovation economy, majoring on IT, communications, medicine, space and nuclear power.
All of which was fine and dandy but his 100-minute speech was notably light on detail. Not least he did nor spell out for foreign investors how he intends to reverse the hostile attitude to outside capital, which has so damaged the country’s reputation, particularly in the key oil and gas sector. Nor did he really address the shrinking economy and growing unemployment. If Medvedev really is seeking to break free from his one-time sponsor and mentor Putin, he should be leveraging Russia’s economic troubles — GDP is slated to fall by 7.5 percent this year — by coming up with clear actions, not long-term strategies. His options are, however, certainly limited.
The levers of economic power still rest with Premier Putin and the bloated state industries. As matters stand, if Medvedev seeks to intervene in the economy he is likely to carry the can for a tough belt-tightening, even though constitutionally, it is Putin as premier who has the executive power. Perhaps this is how it is supposed to be and the president and premier are still working together, as Putin intended. Still only into the second year of his six-year term, maybe Medvedev is setting himself up to be the lightning rod for future public discontent. The blame for economic troubles ahead will, therefore, be diverted from Putin and in 2014 the prime minister will have a clear run at the presidency again.
It is certain that most Russians still value him as the strong man who took their country from the economic and political humiliations of the Yeltsin era. Putin’s eight years as president also coincided with a long interlude of prosperity. The period ahead looks very different.
And there was something particularly odd about Medvedev’s address on Thursday. With all its lofty aims, its focus on the potential rather than the reality of Russia’s economy, it was a speech that could have been made by one of the bright young US-trained Russian economists and bankers who crowded home when Yeltsin came to power in 1991. They convinced the new president to promise economic “shock therapy” and shock it was indeed, though hardly therapy. Savings were destroyed, Russia defaulted on its international debt and the president’s cronies plundered the economy during privatization. With his smart suit and youthful haircut, Medvedev looked very like one of those free market “experts”, whose advice unleashed chaos 15 years ago. Could the resemblance have perhaps been intentional?
