By Eric Kraus, author of Truth and Beauty (and Russian Finance).
The major story is, of course, the return of Vladimir Putin to the Russian presidency – an outcome which we always thought likely given that Medvedev seemed a deeply counterintuitive choice for the Russian presidency. Totally lacking in charisma and with no experience of politics, he was singularly unsuited to lead a country like Russia – with its long history of personalization of power.
The announcement itself was handled with typical Russian coordination and deft spin management. It appears that FM Alexei Kudrin, who clearly coveted the PM position for himself, may actually have learned of Putin’s choice via the press. In any event, his dismissive statements about refusing to serve under Medvedev were quite uncharacteristic of this normally cool and unemotive functionary.
Medvedev took up the gauntlet and promptly dismissed Kudrin on national television; seeking to project an image of tough decisiveness, he instead came across as both petulant and nasty. The FT was delighted; with its habitual mendacious dishonesty as regards all matters Russian, they headlined some nonsense about a “Rebellion in the Kremlin”. This was, of course, intentional and culpable disinformation; there was no “rebellion” – rather, a single key minister who had lost out in his bid for the Premiership bailed, while a couple of advisors to the losing camp expressed their disappointment in terms fairly moderate by Russian standards. On the other side, the local conspiracy theorists are largely convinced that the whole thing was a set-up to allow Medvedev to appear tough and decisive – a very optimistic read, we don’t believe a word of it; as a general rule, we prefer not to attribute to conspiracy what simple incompetence can explain.
Med-who?
Like many intellectuals of his generation who grew up at a time when there seemed to be only the stark, black-and-white choice between Washington and the Soviet Kremlin, Medvedev appears to be naively obsessed with the West, and with the US in particular. He may have overdosed on Deep Purple3 records in his St. Petersburg dorm room, and in this is out of step with a large majority of his countrymen who (outside of the 3% of the population which is young, multi-lingual, middle-class, and lives in Moscow/St. Petersburg) are far more ambivalent. His reform initiatives appeared to be pulled at random from a playbook – then quickly forgotten, or buried in some obscure committee. While a few have created some positive media buzz, drawing attention to Russia as an investment destination, concrete results have been few and far between .
The running joke in Moscow was that there were clearly two factions: a Putin faction and a Medvedev faction… but no one was sure to which one Medvedev himself belonged! He has always been something of a cipher, and beyond a Westernizing gloss, there was little indication of what he truly stood for. Was he simply an emanation of Putin? Did he bring his own ideas? It is unlikely we will ever know.
The love for Medvedev expressed by members of the Western political elite appeared to be based more upon a forlorn desire to deal with ABP (Anyone but Putin) than on any specific virtues of Medvedev; this love should perhaps be tempered by the fact that the public reason for the split between Kudrin and Medvedev was the latter’s demand that 3% of GDP be employed for a build-up of the Russian military; if there was one true Westernizer, it was clearly Mr Kudrin – T&B is running several bets that Kudrin will be back in a position of power within the next 24 months.
Indeed, we suspect that there is more than a little relief in Western capitals as Putin, a known quantity, reassumes formal power in Moscow. Although the swap was presented as having been long planned, T&B always believed that VVP had chosen Medvedev as an experiment, keeping his future plans open for as long as possible; as events revealed his choice of successor to be non-viable, he chose to reassume the Presidency himself. It would appear that Medvedev initially attempted to resist, before giving way before Putin’s far greater popularity and the political apparatus; it is possible that the swap was offered to Medvedev as part of a deal for him to go quietly – if so, then we would very much doubt he will still be PM two years into President Putin’s next mandate.
In any event, Medvedev’s fate was sealed by his catastrophic mishandling of the Libyan situation at the United Nations (regardless of the morality of Western countries taking sides in a civil war in order to preserve their access to oil fields, Russia should have either vetoed the resolution outright, or instead, joined in with the crusaders; by abstaining, followed by angry criticism from the sidelines, the Kremlin sat down squarely between two stools – antagonizing both parties equally and dealing Russia out of any final settlement).
While the British press ran the usual hysterical rants, what was most striking was the very mild reaction of the American media; indeed, usually well-informed sources have claimed to us that the Kremlin had given Washington advance notice of the swap, with the Obama administration voicing no objections. Certainly, the very balanced coverage in the American press gives some credence to this view; “guidance” apparently came down from on high to downplay this story.
The Pragmatic Sanction
While some commentators have considered the swap to represent a setback in the maturation of Russia’s political system, we disagree. From a pragmatic standpoint, there was no other obvious candidate, and we did not savour the prospect of seeing a second mandate for a very uninspiring president, simply to make a (somewhat abstract) point. Furthermore, there is something inherently contradictory in having asserted that Medvedev was nothing more than Putin’s creature, not a “democratically” chosen president – but that now, were a (far more popular) Putin to stand down for his creature, this would suddenly render Medvedev democratic. Without Putin’s support, Medvedev would never have reached the national scene, nor would he now have any meaningful electoral prospects. Once again, we would offer a second interpretation: that the working definition of “democratic” for many in the West is “that which advances the geopolitical interests of Brussels/Washington/London.” The dogs bark – the caravan passes.
Fundamentally, we believe that the return of Vladimir Putin will buy time – time during which Russia will continue its ongoing, organic evolution towards the European norm. An old generation dies off – a new one assumes its place; arising from the same soil, it too will be shaped by the long and singular Russian culture and historical heritage. This generation will not be “Western” but will bring with it a profoundly different personal history and experience, as well as a totally different set of incentives. This steady evolution is occurring as we speak; no one spending any time in Moscow, Ekaterinburg or any of the other major cities can fail to notice the steady evolution of Russian society. The middle-class continues to grow, businesses are formed, people become increasingly cognizant of other cultures and foreign countries, a professional class has been created and we see a gradual “normalization” of Russian sociology.
The new Russian elites are increasingly foreign-educated; their sons educated, at least in part, abroad spend a few years working for Bain or Merrill’s, before returning to apply their experience in the one place that they have a real competitive advantage. The likelihood of Russia returning to some variant on the Soviet model is precisely the same as of it resurrecting Tsarism, or falling again under the Tartar yoke.
Moscow “feels” far more like Europe than it did a decade ago. As in other developing countries, this process shall ultimately lead to the creation of a political system more responsive to the demands of the rising middle classes. Indeed, perhaps the greatest challenge for Russia in this decade is that the system is becoming more democratic – in the sense that the government has become exquisitely sensitive to the desire and needs of the populace; Russia is moving towards the European Social- Democratic model, decreasing the “efficiency” of the Russian budget, though of course, enhancing the well-being of the populace.
Long gone are the days when bureaucrats or police could be paid $100/month while pensioners lived on $6 – having attained decent living standards, the middle classes expect continuity.
Looking forward, we do not know when Putin will leave, nor under what circumstances – what we do know is that he will leave a country totally transformed by comparison with the circus we knew in the 1990s. For this, we are deeply grateful to Vladimir Vladimirovich.
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