RUSSIA'S Dmitry Medvedev spent the first 18 months of his presidency in the shadow of his predecessor Vladimir Putin. Now, with 2-1/2 years of his term still to run, his drive for political and economic reform is running into the sand. Putin's teasing exchange with visiting academics and reporters Friday, giving his strongest hint yet that he may return as president in 2012, made headlines round the world Saturday and, more significantly for Medvedev, inside Russia. Russia's president is looking increasingly irrelevant. Other world leaders are normally spared their “lame duck” period until the final year in office. Timed one day after Medvedev published his vision for Russia's economic and political reform, Putin's intervention appeared particularly significant. “What happened was that Putin reminded Medvedev he has limits he must not overstep, and he chose this forum in which to do it,” said Alexander Rahr, director of the Russia and Eurasia program at the German Council on Foreign Relations. Medvedev has been at pains to promote the image of a president who recognizes Russia's problems and can tackle them. Last Thursday, Medvedev published a 5,000-word letter on www.gazeta.ru website. In it he gave a tough critique of Russia — covering its outdated industry, over reliance on energy exports, corruption, innovation-stifling bureaucracy and widespread alcohol abuse. He said Russia must create an environment that encourages innovation, shifts manufacturing to goods that consumers want to buy, strengthens the rule of law and democracy and encourages Russians to look inward for solutions to their problems instead of always looking to government. “First of all let's address a simple but at the same time very serious question. Are we to continue to tolerate our primitive economy, chronic corruption, custom of referring every problem to the government, to foreign powers, to anyone other than ourselves?” Medvedev wrote. Even in Russia's most efficient industries — in the energy sector for example — productivity is roughly a third of that of counterparts in the United States, analysts say. But a rebound in the oil price to around $70 a barrel — Russia is shoulder to shoulder with Saudi Arabia in export terms — has given a much needed boost to export revenues and camouflaged economic problems. “The prosperity we see is very dependent on oil prices. In the long run that stifles any attempt to build up other industry. It means a strong ruble, making imports very attractive, which undermines attempts to build up domestic industry,” said Marshall Goldman, senior scholar at the Davis Center for Russian and Eurasian studies at Harvard University. “It brings a lot of jobs in energy but destroys lots of jobs in other sectors. That in the long term is more important, especially once you get outside Moscow, Saint Petersburg and the oil producing areas.” In Yaroslavl, a four-hour train ride to the northeast of Moscow, local people say they are worried about factory closures and job layoffs. Last month, 1,500 AvtoVAZ car workers gathered in the city of Togliatti southeast of Moscow to protest over pay cuts and layoffs. Kremlin aide Arkady Dvorkovich said Saturday Russia's jobless rate may rise in the autumn. It stood at 6.3 million people or 8.3 percent in July. Medvedev was Putin's chosen successor when he was sworn in as president early in 2008 after Putin's term expired and he moved into the role of prime minister. Their much vaunted leadership in tandem has been under scrutiny ever since. Putin's personal popularity far exceeds Medvedev's, despite an economic downturn exacerbated by the policies Putin pursued during his time as president. “There is a feeling that Putin gives an order and the tide stops coming in,” Goldman said. The difference — albeit a subtle one — between Putin and Medvedev in their words and their emphasis may be creating similar divisions within the ruling elite. Assessments of Russia's economic progress vary, depending on whether one is speaking to the Putin or Medvedev team. Putin's line and that of his allies is that Russia will emerge stronger from the global financial crisis. “Our task is to diversify the economy, increase efficiency and invest in human capital — health care, education, etc. These priorities have not been changed by the crisis. We should emerge stronger,” the prime minister said Friday. Medvedev and his top financial adviser, G20 sherpa Dvorkovich, see plenty of work to be done. “Most Russian manufacturing belongs to the previous century in terms of what it produces,” Dvorkovich said. “The important thing is to make products that people will buy.” In terms of pushing through reform, Dvorkovich said: “The president is ready to fight for what he believes are the right things to do in Russia now.” Asked how long Medvedev had to make changes, he answered: “Looking at the calendar, 2-1/2 years.” Rahr's interpretation of the comment was clear: “Dvorkovich was expressing the hope that in 2-1/2 years the people will get a chance to judge.” Medvedev has his work cut out judging by recent polls, which point to 60 percent of those surveyed saying it is good that power is concentrated in Putin's hands. With no real power base, Medvedev continues to rely on Putin's patronage.
