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Analysis & Opinion
07.11.08 Russia Profile Weekly Experts Panel: Medvedev’s Scorecard
Introduced by Vladimir Frolov

Contributors: Stephen Blank, Ethan Burger, Elena Miskova

Medvedev was elected on a promise to ensure policy continuity and to implement what was then called “Putin’s Plan.” That was in March of 2008, when things were going well for the country and the price of oil was over $100 a barrel. It was logical at that time that the Russian people, with their incomes growing steadily and cheap car loans and mortgages readily available, desired more of the same.

Medvedev promised exactly that, but also something more – a strong push for the country’s modernization – from fixing the dilapidated transportation infrastructure and the substandard healthcare industry to education reform. He also talked about stimulating innovation to wean Russia from its dependence on oil and other commodities. Medvedev spent the first two months in office laying the groundwork for his modernization agenda.
Then a lot of bad things happened to test Medvedev’s leadership.

Georgia’s invasion of South Ossetia presented the young Russian leader with his first major international crisis and the need to send Russian troops into battle to fight a former Soviet state. It was a decision his predecessor never had to make.

Medvedev demonstrated his ability to make tough choices and be guided by a moral obligation of staying true to high principles whatever the costs. His decision to recognize Abkhazia and South Ossetia as independent states may look questionable to some, but showed courage and ability to withstand pressure. Medvedev emerged from the crisis as a leader whose word counts for something.

The global financial tornado hit Russia with full force in September, destroying the Russian stock market and putting the country’s modernization agenda into jeopardy. Instead of implementing his reforms, Medvedev is now forced to put out fires in the Russian financial system, dealing with credit tightening, bank failures, attacks on the ruble and Western banks’ margin calls on major Russian companies about to default on their loans.

A rosy growth outlook for the Russian economy has been replaced with predictions of a hard landing and a recession. People accustomed to growing incomes are facing layoffs and frozen wages. This is not the agenda Medvedev was elected to implement, but a reality he has to deal with. His predecessor was incomparably luckier.
How is the new Russian leader fairing in the times of growing trouble for Russia? Is he providing steady leadership at home and abroad, as he travels to Washington for the G20 summit on November 15? Has he been able to assemble a cohesive team to deal with the crisis? Has he been able to assert his leadership as president? How is his relationship with Vladimir Putin evolving during the hard times as opposed to the good times? Has he proven to be an effective and popular president?

Ethan S. Burger, Adjunct Professor, Georgetown University Law Center, & Scholar-in-Residence, School of International Service, American University, Washington, D.C.:

If one studies some of Winston Churchill’s great speeches during the Second World War, a discernable pattern will emerge. He would begin by discussing the worst news. He would then outline in broad terms the steps his cabinet (and military) would undertake to withstand and reverse the setbacks. He would usually end with a call on the people to make sacrifices for the greater good, and express confidence that they possessed an inner strength to eventually prevail.

To some extent, the Russian President Dmitry Medvedev seems to be following the same model. Generally, he is not downplaying the economic crisis that Russia is facing along with the other leading economic powers. He recognizes the complexity of the present economic situation and the need to develop an international approach to prevent the situation from aggravating. However, his suggestion that Russia appreciated better and earlier than other countries the severity of the problem was certainly not constructive, and probably not true.

In any event, president Medvedev recognizes that Russia’s economic future is intimately tied to that of other nations. It is a positive development that the Investigative Committee saw the necessity of releasing the Deputy Finance Minister Sergei Storchak, so that he will be available to assist the Finance Minister Alexei Kudrin during these difficult times. Storchak had been Russia’s senior debt negotiator, who may have been the innocent victim of domestic politics. He is a capable individual prepared to serve his country.

Some observers rightfully fear that the government’s economic rescue program will be driven by a desire of the political leadership to help its favorites and expand the governmental ownership in various sectors of the economy. On more than one occasion, it has been described the “loan for shares” program in reverse.

It is a mere coincidence that the global economic crisis should coincide with president Medvedev’s efforts to deal with the country’s corruption problem. If he oversees an economic program that is not tainted by corruption or favoritism, president Medvedev could find himself in a position to exercise the authority he should possess under the Russian Constitution, so that he is not beholden to the country’s oligarchs and those individuals who in the past seem to have used their governmental positions to further their own economic and political power, rather than act in the interests of the Russian people.

At the present time, however, it is premature to offer a genuine assessment of whether president Medvedev has risen to the economic (and political) challenge, or is merely the public face for others who really control the country’s fate at present. In light of the above discussion it is both disturbing and surprising that in his annual address to the Russian Federal Assembly, he announced that Russia would station missiles in Kaliningrad and proposed that the term for the office of the president be extended from four to six years.

Both in substance and in tone, such statements will only decrease the desire (and ability) of most other countries and foreign investors to deal with Russia in a constructive manner. While president Medvedev may merely be throwing a bone at the “siloviki” (whose influence relies on the existence of a high state of tension with the West, however defined), many fear that president Medvedev is signaling his willingness to facilitate Putin’s return to the presidency.

The Russian political elite (and the middle class) should query whether such statements will isolate and harm Russia both politically and economically. Now that Russia purports to be the champion of self-determination, one wonders how the Kremlin would react if the residents of Kaliningrad express a desire to be citizens of EU countries such as Germany and Poland. In addition, as President-elect Barack Obama assembles his economic, energy and national security teams, persons who might be inclined to be more sensitive toward Russia’s perspective will have difficulty advocating such policies.

Elena Miskova, Chair of the Board, the State Club Foundation, Moscow:

t is still too early to judge whether Medvedev is a successful president or not. He has been in office for about six months, and most of his accomplishments or failures are still in the future. But it has to be recognized that he has been dealt a no less difficult hand of cards than his predecessor Vladimir Putin.

Medvedev’s presidency began amid rosy economic forecasts that saw Russia growing for the next several years at a stunning rate of seven percent per year. This week, the International Monetary Fund released a report downgrading Russia’s growth in 2009 to just about 3.5 percent. Some are even predicting a recession.

Medvedev is dealing with a huge worldwide economic crisis that is destroying global demand for Russia’s exports and depressing Russia’s export earnings. This is a situation Putin never had to face. He was blessed to have rising oil prices throughout his entire eight years in office.

The financial crisis puts Medvedev’s modernization agenda into jeopardy. Russia simply might not have the resources that would be needed to modernize its crumbling infrastructure, its dismal healthcare system and its education system that is lagging behind and infested with corruption.

He also had to deal with a war with Georgia that dramatically changed Russia’s international environment and exposed it to pressures that Moscow has not faced since the last war in Chechnya.

So far he has stood up to such hardships with admirable calm and self-assurance that is welcome in the times of public apprehension, when people and businesses need to see steady leadership.

He is also showing a more open political style that is more fitting for the era of internet and wireless communications. In short, he has proven to be competent, reliable, calm, confident and…a little dull.

But he is yet to put forward any inspirational ideas that will take the country to new heights and it is not clear whether he has a plan for this.

Professor Stephen Blank, the U.S. Army War College, Carlyle Barracks, PA:

hat looks to some like courage and an adherence to principle looks very different to others. However, what is observable as of now is not at all comforting. Sources report that Putin was dismayed at the recognition of Abkhazia and South Ossetia as a political mistake, which it was. So too is the decision to place Iskander missiles in Kaliningrad. Moreover, there have been no domestic reforms. The anti-corruption campaign has nothing to show for it.

The economy will produce major challenges. Putin and Medvedev have both conspired to tell Russians that it is not their fault and that all will be well, and they have bailed out too many of the wrong actors. The impact of falling energy prices ($65 a barrel at the time of this writing) is enormous, especially since the energy companies are among the most mismanaged in Russia and heavily leveraged with debt.

Major national projects like the reconstruction of Siberia and the Far East are stagnating at best. In foreign policy, Medvedev has proven to be an apt pupil of his master, but efforts to blame America for everything are not only misguided, but also shortsighted. As state controls and autarchic exclusion of foreigners grow, and as foreign investors will long remain chary of investing in Russia, an enlightened long-term view of Russian national interest should stress peace and cooperation with the West, especially as there is no military threat.

Neither NATO enlargement nor missile defenses constitute a threat to Russia (if they did, Russia would not have left the CFE treaty). So the immense outlays on military spending, 30 to 40 percent of which are regularly stolen according to insiders, is another suboptimal project. But it is not only Medvedev's fault. After all, Putin is still pulling lots of strings, like calling back the presidential speech for revisions, and keeping his boys like Sechin in power over large swaths of the economy.

In this context, the speech to the parliament represents an example of political pathos, not courage and standing up for principle. But what Putin has wrought is likely to come crashing down as the inevitable crisis (I predicted it would come in 2010 at last year's American Association for the Advancement of Slavic Studies convention) spreads.
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