London, Asharq Al-Awsat- On May 7th Dmitry Medvedev was inaugurated as the new President of Russia. An English-speaking 42 year old lawyer, he is the first truly post-Soviet leader who has matured not in the Communist party, as did the first President of Russia Boris Yelstin, or inside the KGB, as did his predecessor Vladimir Putin, but inside the new Russia. He has taught law at St. Petersburg University, listens to rock music and is known to begin his mornings by logging on to the internet to check Russian and foreign news sites. This certainly represents a change in Russia’s political tradition. Yet it is unclear whether the new man in the Kremlin will change the course of Russia’s history. Many questions still remain on the extent to which President Medvedev will be able to consolidate real power, to change Russia and to change Russia’s relations with the world. While in most democracies the inauguration signals the end of the power succession process, in Russia is it only the beginning.

Putin legacy

Unusually Medvedev’s inauguration included a lengthy speech by the outgoing President Putin. This was more than a sign of continuity, but a reflection of the real balance of power in today’s Russia. Even after the inauguration, Putin remains a real power behind the throne. It was Putin who just a few months before the presidential elections nominated Medvedev as his successor. Medvedev sailed comfortably through the elections, his 70% victory in the polls reflected Putin’s popularity. His programme had one message – to continue Putin’s policies. His team –before and after the elections – consisted almost entirely of members of Putin’s inner circle. In fact Medvedev himself has been a member of Putin’s team for over 17 years of his professional carrier.

If this is not enough to understand where the informal power lies, Putin has decided to keep the formal reigns of power as well. Even before the start of Medvedev’s election campaign, Putin announced that he would become the prime minister after he stands down from the presidency. Medvedev was fast to nominate Putin to this position after the elections and the parliament approved the decision the next day after Medvedev’s inauguration. In fact Putin controls the parliament too. A few weeks ago he agreed to become the head of the United Russia Party – the largest political force in the parliament which won the December parliamentary elections by swearing full support for Putin’s policies and full loyalty to the man himself, even though he was not formally either a party member or its chairman at the time.

And this is not all. A week before leaving his presidential office, Putin introduced a number of decrees which transferred some key presidential powers to the prime minister, including the subordination of regional governors to the prime minister. Moreover, Putin’s men sit on the boards of key state corporations including powerful energy giants and the state gas monopoly Gazprom. And finally Putin, as the former KGB man who has given those in the security forces – so called siloviki – a great deal of power over state and business, will remain a de facto leader of the security community, regardless of the fact that the constitution puts them under the control of the president. It was Putin, not Medvedev, who will announce the new appointments of the ministers of defence and security after the new government has been appointed.

In these circumstances there should not be any doubt that in the foreseeable future the real power will stay with Putin, the prime minister. Government will be transformed from leucocratic machinery, as it was when Putin was the president, into full fledged powerhouse, and the key political entity. Medvedev’s role will remain largely ceremonial and devoid of any independent strategic decision-making power. The question is whether this duality of power, unprecedented for Russian history, can last?

Medvedev’s Strategy

This duopoly, as it has become known, could last for a long time, provided that Medvedev either accepts his subordinate role, or fails to prove its legitimacy and his ability to govern independently. There are signs, however, that neither of these assumptions is true. On one hand, Medvedev does not see completely eye to eye with Putin on many policy issues, including the key strategic decisions in regard to domestic economic reforms. On the other hand, he could build a powerful coalition of forces among Russia’s economic, political and regional elite, who want to see a change from Putin’s approach to running the country. Is it only a matter of time before the new man in the Kremlin will start to emancipate himself from his dependency on Putin? What might be the main driving forces for such change?

Firstly, history is on his side. Medvedev has a small but real chance to begin modernising Russia in earnest. The first Russian president, Boris Yeltsin, sought to dismantle the Soviet system, but virtually destroyed the country in the process, leaving Russians deeply traumatised and mistrustful of democ¬racy and liberal ideas. Putin saw his task as rebuilding the Russian state after Yeltsin, overcoming the country’s humiliation and giving Russians hope of a stable future for themselves and their children. He accomplished this, but only by relying on Soviet-era symbols to rebuild national identity; weakening and undermining institutions by removing any real choice from elections and any independence from the parliament; reinstating total state control over the media, limiting the freedom for civil society to develop and to influence policy debate; breeding corruption; and failing to establish the rule of law or an independent judiciary. Putin has replaced state institutions with a network of loyal associates – most with links to the Soviet-era secu¬rity community – who have been given extensive powers to oversee Russian governance and key sectors of the economy. Inevitably, Putin’s quest to restore Russia’s great-power status, backed by authoritarian capitalism and balance-of-power politics, put it on a path of confrontation with the West. Putin’s model has reached the dead-end in its capacity to modernise Russia. A new approach is needed to realise this historic opportunity.

Medvedev is the first leader of post-Soviet Russia who has come to power with no sense of existential crisis looming over the country. His task is not to launch a revolution or achieve national salvation, but to undertake pro¬jected technocratic reforms which could begin to establish the rule of law and free the nascent entrepreneurial class from the tyranny of the bureauc¬racy. Medvedev has proposed concentrating on four ‘I’s: building genuine institutions; improving infrastructure; supporting innovation; and investment growth. To realise these objectives he needs to change policy. The current system does not support the development of institutions; it restricts investment and innovation; which will make it difficult to translate spending into real improvements in infrastruc¬ture. This must have been apparent to Medvedev when he was in charge of implementing ‘national projects’. Millions of dollars were spent with little result. The present state simply cannot translate funding (however great) into modernisation (however modest). Although Putin remains the prime-minister, it will eventually up to the president to begin rebuilding impendent institutions, fighting corruption and establishing the rule of law. Medvedev clearly believes in these ideals, but lacks a power base which can support his vision.

This powerbase exists in Russia in the form of its rising middle class. In 2001 the Russian middle class consisted of approximately 4 million people (or 8 million if dependents were included). By June 2007 the middle class had risen rapidly to approximately 25% of the population or around 35 million people. In his inauguration speech President Medvedev stated that he wanted ‘as many people as possible to join’ the Russian middle class to gain access to good quality education and health services. The Kremlin’s aim of bringing household incomes in line with the EU average by 2020 also envisages a significant expansion of the middle class in future years. The expansion of the middle class in Russian society is likely to significantly affect its future economic and political development. However, in Putin’s Russia the middle class, particularly the genuine entrepreneurial part of it, have been excluded from the political process and fallen victim to corruption and the lack of the rule of law. They now represent a constituency which could support Medvedev’s vision to overcome these problems. For this, however, President Medvedev needs to start opening up society, limiting restrictions of the freedom of speech, supporting the free media and civil society and stopping prosecution of the pro-democratic opposition. In a way he needs to prove that next time around he will be able to organise a genuinely free and fair election and win them by incorporating the rising middle class into the political process.

Russia in the world

While Medvedev’s domestic political battle is far from even starting in earnest, his impact on Russia’s foreign policy is likely to be felt almost immediately. Moreover, if in domestic policy he clearly stands behind Putin, internationally he will be the one representing Russia at key events – like the G8 Summit – and in dialogue with foreign leaders. As he learns about key foreign policy issues– having almost no real international experience – Medvedev will undoubtedly change the style of Russian diplomacy. Medvedev has to show he can advance national interests without locking Russia into new confrontations with the West or with neighbouring states like Georgia and Ukraine. While Putin used assertive unilateralism and arrogant rhetoric to convince Russians he had restored Russia’s great-power role, it will be up to Medvedev to prove that this self-declared status can deliver real benefits. In the months preceding the presidential elections, powerful voices within the Russian business elite and the bureaucracy expressed doubts as to whether Russia’s current foreign policy is compatible with the country’s immediate and long-term economic and business interests, its ability to address challenges at home and in its neigh¬bourhood, and the prevention of a fundamental breakdown of relations with the West, which accounts for most of Russia’s trade and investment. Another challenge is how to translate rhetoric into real breakthroughs on such difficult issues as deployment of US missile defence, Iran’s nuclear programme and relations between Russia and the West in the post-Soviet space. Medvedev is expected to pay the first foreign visit to Kazakhstan and China to reaffirm Russia’s “multi-polar world” vision. It looks like most of his foreign interlocutors will be more curious to know how he could manage multi-polarity at home. Putin’s era in Russia is far from over.

* Senior Fellow (Russia and Eurasia), IISS