The foreign banks active in Russia tend to have a far more informed and less cliched view of Russian politics than foreign policy analysts in Washington or London. They also tend to have better contacts with Kremlin sources than foreign diplomats, particularly the woeful British embassy in Moscow.
Banking analysts and strategists have been quick to recognize the ramifications of Putin’s handover of the presidency to Dmitri Medvedev. As Deutsche Bank’s Russian research team says in a report today:
If Putin was as keen to retain full political control over the foreseeable future as most of the Western press suggests, he would have opted for a third term in our view…Thus, in our view, Putin’s voluntary exit from the Kremlin puts a huge question mark on the consensus opinion that the political strategy is a retention of the status quo of the recent past.
So if we’re not going to see a continuance of the status quo, what will we see? Deutsche thinks probably a change in the personnel running the national champions. Out with the KGB, in with more private-sector individuals:
we believe that substantial – and welcome — shifts in the balance of power within the political establishment are highly likely in the coming months. Putin’s first priority in 2000 was to check the predatory behaviour of oligarchs and create incentives for them to use their efforts more productively. Similarly, it is quite likely that in his first 6-12 months as president, Medvedev will concentrate on tightening the leash on the burgeoning bureaucracy, which has shown increasingly abusive behaviour in recent years.
Medvedev’s mission is finally to modernise the public sector. In order to achieve that, he will most likely have to rely on the expertise and human capital of the private sector once again. Therefore, the key gauge to watch, politics-wise, is not simply the alignment of top ministers in the next government, but also the tendency of seasoned private sector professionals to take senior roles in policy-making and state-controlled corporations.
The real challenge for Medvedev and for Russia, in the coming years, is whether he can de-personalize Russian politics. Putin built up a political system where power was very much centred in his person, at the cost of just about every other institution – the press, the judiciary, the Duma, the party system, the NGO sector, the business sector, the regions. In essence, he made himself a Tsar again, albeit a Tsar prepared to relinquish power after eight years.
If Medvedev simply turns himself into a new Tsar, and keeps the other institutions of the country in a state of arrested development, he will not have taken Russia forward. But which politician ever consciously lets go of the powers of their office? As Yevgeny Yasin, head of the Higher School of Economics in Moscow, put it: ‘Medvedev is a good boy. But he will face many temptations in office.’
