Putin v Medvedev

Adrian Pabst writes:

The Russian president Dmitry Medvedev delivered his annual state-of-the-union-address last week in front of the country’s political and business elite. His speech built on a text he released two months before, “Forward Russia”, in which he set out radical plans to modernise Russia’s economy and society.

Taken together, these interventions confirm that Mr Medvedev is not a figurehead who will quietly step aside for his predecessor and erstwhile mentor Vladimir Putin, the current prime minister who is widely suspected of plotting a return to the presidency in 2012.

This conflict is about much more than personal ambitions. We are seeing a growing split within the ruling regime on ideology and policy that presages a vigorous contest over how Russia should be ruled. By declaring that “Russia can and must become a global power on a completely new basis”, Mr Medvedev has rested his claim for a second presidential term on his ability to transform the country, a stark contrast to Mr Putin, who has blamed Russia’s problems on foreign interference and conspiracies.

Many politicians and pundits have dismissed any distance between Mr Putin and Mr Medvedev as based only in rhetoric or as an elaborate trick to mask Russia’s drift towards authoritarianism under the guise of liberal modernisation. It was this strategy that was at the core of Mr Putin’s management of conflicts within the Kremlin when he served as president. He used it to offset and placate the two dominant factions in Russian politics: the liberals who demanded market reforms and the Siloviki, coming largely from the security services who sought to reinforce the central authority of the state. Mr Putin’s lasting legacy was to replace the former Russian president Boris Yeltsin’s oligarchic capitalism with a bureaucratic form of state capitalism, based on a patrimonial fusion of power and property. Mr Putin rewarded liberals and hardliners alike with government posts and control over state-owned corporations.

It is this legacy that Mr Medvedev is now challenging. He has repeatedly attacked the collusion of bureaucrats and businessmen who share the rents that accrue from their joint ownership of the country’s assets, especially energy resources and other primary commodities. These practices reinforce widespread inefficiency in Russia and its shockingly low levels of productivity.

Mr Medvedev has called for an entirely new economic settlement whereby Russia moves beyond the “primitive economy based on raw materials and endemic corruption”. During Mr Putin’s tenure as president he did not just fail to modernise the obsolete infrastructure of the country’s energy sector but also missed a unique opportunity to use the billions of dollars in state revenue to diversify the country’s economy.

Crucially, Mr Medvedev’s plans to modernise Russia are not limited to conservative state consolidation or liberal reforms of privatisation and deregulation. His new strategy aims to break the old top-down approach of command and control in Russia. Mr Medvedev seeks to overcome the concentration of power and wealth not simply through reforming the state and market but above all by strengthening civil society, which Mr Medvedev describes as “weak” along with Russian “levels of self-organisation and self-government”.

What’s radical is that Mr Medvedev links economic and political transformation to social change. He wants to tackle “persistent social ills” such as dependence on a totalitarian state, paternalism, “legal nihilism”, and the corrosive effect of financial and moral corruption (including “intellectual and spiritual laziness”). The trouble is that Mr Medvedev’s specific proposals on economic innovation and political reform are insufficient and his overall approach remains state-centric.

What is required first is to offer ordinary people a share in the country’s resources. Examples include giving citizens vouchers for higher education – even state universities now charge significant fees – and introducing asset-based welfare such as child trusts or lump-sum payments at the age of 18 for investment in education or property. Employee stakes in public companies and turning state-run corporations into “public-interest utilities”, where profits are reinvested and shared among staff rather than siphoned off by investors and bureaucrats, should also be considered.

Secondly, the government needs to move beyond mere declarations of intent and remove barriers to a more vibrant civil society, including the lack of a free mass media and official glorification of the state. Government must also offer incentives for people to form professional associations, guilds, and other structures that redistribute power and responsibility from the state to individuals and their communities.

The question is why Mr Medvedev has not yet delivered on his promising overtures. There are two rival hypotheses. He may indeed be part of a managed democracy and merely provides the liberal cover that helps legitimate Russia’s increasing authoritarianism. Or Mr Medvedev does have his own ideas but lacks internal support to push them through as Mr Putin refuses to give him space to govern even 18 months after he became president. The growing rift between the two on ideology and policy points increasingly to the latter. Mr Medvedev’s recent indictment of those who glorify Stalin’s legacy is yet another attack on one of Mr Putin’s political pillars – the restoration of Soviet symbols. Mr Medvedev appears to be offering an alternative vision for Russia, shaped neither by western liberalism nor pan-Slavic nationalism.

Still, the possibility of greater authoritarian consolidation has not disappeared; but neither has the potential for democratic renewal. Indeed, Mr Medvedev’s recent actions indicate a clear and growing rift between his camp and Mr Putin’s. It is this rivalry that will shape the contours of a future contest over ideas and policies in Russia.