Dmitry Medvedev was sworn in as Russian president Wednesday and just over two hours later nominated his predecessor Vladimir Putin as prime minister, ushering in an unprecedented period of dual rule. Medvedev, a 42-year-old former corporate lawyer and longtime Putin ally, stressed freedom and the rule of law in his first remarks after taking the oath of office in a solemn, emotional ceremony in the Kremlin's glittering St. Andrew's Hall. “I believe my most important aims will be to protect civil and economic freedoms,” he told guests at the inauguration, broadcast live on state television. “We must fight for a true respect of the law and overcome legal nihilism, which seriously hampers modern development.” Shortly afterwards, the government led by Prime Minister Viktor Zubkov followed protocol by resigning. This cleared the way for Medvedev to nominate Putin as prime minister as the carefully choreographed transition unfolded. The new leader inherits a booming economy fuelled by high oil prices - and a sobering set of challenges. They include rampant corruption, rising inflation, a falling population, sickly industry and agriculture and increasingly tense relations with former Soviet neighbors and the West. Putin has also been accused by domestic critics and Western governments of trampling on human rights and limiting freedom. Before Medvedev was sworn in, a sombre-looking Putin entered the Kremlin alone, bid farewell to the presidential guard and thanked the Russian people for their trust over his two four-year terms. Barred by term limits from standing again, he encouraged his audience to support Medvedev but told them not to deviate from his policies. “It is very important for everyone to continue the course we have started already and which has proved right,” he said. Putin named Medvedev as his preferred successor last December, ensuring his overwhelming victory in the March polls. The two men have worked together since the early 1990s. The Kremlin leader will retain major political influence after quitting, both in his new role as prime minister and as head of the ruling United Russia party which controls parliament. He remains by far Russia's most popular politician.