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Analysis & Opinion
24.06.11 Russia Profile Weekly Experts Panel: Medvedev’s Blueprint For Change
Introduced by Vladimir Frolov

Contributors: Vladimir Belaeff, Elena Miskova

In a speech that many Russian analysts deemed “political,” as reflecting his intention to run for a second presidential term, at the St. Petersburg Economic Forum last week President Dmitry Medvedev unveiled a detailed and realistic blueprint for changing Russia as we know it.

Does he have the power to implement his blueprint for changing Russia? What is the biggest challenge for Medvedev in implementing what he says? Was the speech in St. Petersburg his re-election manifesto? Does it signal his determination to challenge the status quo?

Medvedev argued last week that the model of growth based on state spending of oil revenues and using up spare Soviet-era capacity is exhausted. Too much centralization leads to stagnation, and the time has come to reduce the role of the federal government in the economy and in local politics, to expand the space for private business and political initiative. In his words, it’s time for decentralization and devolution of power from the Kremlin to Russia’s other political institutions, to its regions and their local governments.

Medvedev pledged to give up control of some of Russia's largest companies, implement a clampdown on corruption and cut the corporate tax burden. He stressed that the state must allow a greater role for private enterprise, after a decade in which it had concentrated on securing control of those industries it perceived as strategic­. He offered to fight corruption among Russia’s civil servants and the police. "We are no longer building state capitalism," Medvedev said. He emphasized that the model of strong state regulation was becoming dangerous, as stabilization could easily turn into stagnation. He pledged to carry out his “modernization project” irrespective of who would occupy the leadership positions in Russia’s government. "Modernization is my responsibility," he declared.

Medvedev offers an attractive platform for change with a seemingly realistic roadmap. It is a curious mixture of U.S. President Barack Obama’s progressive liberalism and British Prime Minister David Cameron’s conservatism that seeks to spurn private entrepreneurship and civil activism and push them to step in for the government. It proceeds from a healthy skepticism in the government’s ability to regulate human ambition while advocating the primacy of the rule of law to ensure fair play. Medvedev's promise of decentralization and liberalization runs largely counter to the trend of economic policy during Vladimir Putin's presidency between 2000 and 2008.

In short, Medvedev seems to hit all the right buttons and makes it clear that he “gets it,” but does he have the power to implement his blueprint for changing Russia? What is the biggest challenge for Medvedev in implementing what he says? Was the speech in St. Petersburg his re-election manifesto? Does it signal his determination to challenge the status quo? What governing philosophy does Medvedev stick to? Is he a liberal, a progressive, or a social conservative? Or does it matter at all in Russia? Will Medvedev’s blueprint ever be implemented?

Vladimir Belaeff, Global Society Institute, San Francisco, CA

In St. Petersburg president Medvedev offered not a “blueprint for change,” but a grand strategic vision. A blueprint is a detailed plan for the construction of some specific object; nothing like a detailed plan could be presented in the format and context of Medvedev’s speech.

The Russian term used by president Medvedev in reference to the present Russian economic dynamic is mistranslated in the introduction as “exhausted.” A more accurate English language translation is – “reached its limits.” This is important to note, because evidently, current revenue sources (petroleum, natural gas, grains, aluminum, weaponry, space exploration services, many others) are not exhausted, remain in strong and growing demand, have markets domestically and internationally and will continue to generate revenue for Russia for many decades.

What president Medvedev voiced was a plan for additional economic growth and diversification and not the substitution (suggested by the mistranslation “exhausted”) of current revenue sources with new ones. What will be added and how the addition will occur remains to be defined.

The vision outlined in Medvedev’s St. Petersburg speech is vast. This is suitable for a strategic outline, in particular when addressing an audience of potential foreign investors. However, strategic visions are not implemented. What gets implemented are the components that meet a particular strategic objective. The distinction between a strategic vision and its components is important, because a strategic vision is by definition broad, and even unbounded, and not fixed in precise time boundaries.

Redirecting the question to specific elements (to be defined) that would support president Medvedev’s vision, one is still troubled by the timeframe “ever?” The word “ever,” like “never,” is vague. What is the scale of “ever?” One presidential term? Two presidential terms? A generation? A century?

Let us define the timeframe for the question as the “next 20 years” – which is only ten years past the symbolic date of 2020 for Russia’s present reform strategy. In the 2030 timeframe one can be sure that several of the objectives mentioned by president Medvedev can be implemented.

There is a priority. The most urgent is a sharp reduction of corruption in the country. Associated with this is a sizable increase of the level of professionalism and competence of the civil service. Russia is presently at obscene levels on Transparency International’s indexes. Corruption and an incompetent civil service stand in the way of all reform in Russia.

If the above problems are not solved, then all other reforms will be futile and unlikely to be fully implemented. It is not clear whether Russia has the social and political willpower, and the technical apparatus, to really tackle corruption and civil service malfeasance.

Overall, another strategic difficulty that must be overcome is the lack of sufficient human resources, both managerial and political. Due to the lack of a true political class in Russia, the devolution of power to municipalities today will expand the criminalization of local governments – like the notorious situation in Gus-Khrustalny, only multiplied by a factor of 100,000.

To have healthy local governments Russia needs honest and sensible local politicians. What will happen if criminals or neo-Nazis start winning local elections and developing a network of territories essentially outside the law? Medvedev’s vision requires development of Russia’s human capital, which are certainly possible and welcome, and a prerequisite for reforms – but this will require time for the new class of politicians to grow and mature, and cannot be imposed artificially.

Therefore, it is dangerously naive to demand or expect premature political changes for Russia’s regional and local governance – a mistake may affect the entire world.

Elena Miskova, Managing Partner, LEFF Group Public & Government Relations, Moscow

It would be great to be able to say today that one could vote for Dmitry Medvedev for president. But currently there is no such option for those who wish to support Medvedev and want him to run for the second term.

That option is denied by Medvedev himself. Last week in St. Petersburg, his hometown, as a matter of fact, he failed again to announce his candidacy.

One can understand the overwhelming political and moral reasons for Medvedev’s reticence on the subject. He has political obligations and perhaps debts of honor to pay.

But his reluctance to speak his mind on the matter casts him as indecisive and disappoints people who are sympathetic toward him now. He needs to cast his lot one way or another and the sooner, the better.

Otherwise, the grand visions and detailed blueprints that he regularly churns out, despite their attractiveness, will turn into political lemons.
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