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The Next Putin Presidency

Interviewee: Stephen Sestanovich, George F. Kennan Senior Fellow for Russian and Eurasian Studies
Interviewer: Bernard Gwertzman, Consulting Editor
May 4, 2012

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Vladimir Putin's inauguration as Russia's president, slated for May 7, raises questions about whether the "new" Putin will be different from the Putin who served two terms as president from 2000-2008, says CFR Russia expert Stephen Sestanovich. "The question Russians are preoccupied with right now is not mind-reading of Putin, but watching for the political moves that he makes in the early going," for example on cabinet choices, says Sestanovich, who predicts "more competitive politics" in Russia. He also says that Putin's support is now mainly from the lower-paid classes, the workers and farm workers, with the opposition mainly from the middle class. On U.S.-Russia relations, Sestanovich says the indications are "mixed," with disagreements on missile defense but signals of softening on Russia's position toward Syria, for example.

Putin had to step aside after his second term because of the two-term limit. For the next four years, he served as prime minister while Dmitri Medvedev, his hand-picked successor, was president. Now he's become president again after a somewhat controversial election in March. Will this new Putin be like the old one, or different?

Every Putin term has been different. We've had three Putin terms so far: the first two where he was the president, then the third where he was the prime minister. Now he's back for his fourth as president again. The question Russians are preoccupied with right now is not mind-reading of Putin, but watching for the political moves that he makes in the early going. There is a huge fight going on now, for example, about who gets in the cabinet. Is it going to be a cabinet of liberals or conservatives? The general view in Moscow is that there's a kind of competition between the Western-leaning, liberal technocrats and the staid old KGB-types.

That will await Medvedev becoming prime minister, and picking the cabinet at Putin's direction, right?

Yes. Medvedev will be nominated by Putin, barring some great surprise, and then he will be confirmed by the Duma [parliament].

Is there controversy over, say, foreign minister Sergei Lavrov as foreign minister?

There's less speculation about the foreign policy and national security jobs and more about economic policy. One of the prominent issues is privatization. When Medvedev was president, he attacked the state's role in the economy. There is now a whole raft of privatizations on tap, meaning the selling of state shares in some of the biggest state corporations. The conservative counterattack has been that this is not a good time to sell those shares, that the state needs to retain control; there will be a loss in selling them at depressed prices.

Isn't Russia's economy doing very well right now?

The economy grew before the crisis of 2008 at about 7 percent a year. The forecast for this year is 3 percent plus, and the hope is to get it back to 4 percent plus. That's the range of growth possibilities people foresee. There's a big argument going on between the finance ministry and the economics ministry about what kind of deficit is acceptable. The economic ministry is proposing more spending on health, on education, and science, in an effort to improve human capital and encourage innovation and address long-neglected infrastructure needs. The changes being proposed in each area are not so great, but altogether it's a shift over the rest of this decade of about 10 percent of GDP, and that's really huge. As for the finance ministry, they continue to advocate the tight budgeting that has basically served Russia well in the past decade. Liberals are divided on these issues. In some respects, it's a debate among two liberal camps, but it's very consequential for Russia's economic future.

Medvedev visited Silicon Valley last year and made a point about wanting to start a similar kind of high-tech industry outside of Moscow. Is that going ahead?

Yes. It's called Skolkovo. It's a Moscow suburb, and the effort is to try to encourage technological innovation, to incubate new ideas. Right now it's sort of a glorified business school, but there is a big effort to draw in Western investors. A number of Western companies have shown interest. Many critics, Russian and foreign, have said that it shows a basic misunderstanding of how innovation works. They say you can't create Silicon Valley by government decree.

A big story out of Russia recently was the demonstrations in December over alleged irregularities in that month's parliamentary elections, and there was a lot of talk about political reform. Do you think there'll be a loosening up politically in Russia?

This is another issue hotly debated among Russians. There's a lot of attention being paid to the details of the new law on elections for governors. Governors have, since 2004, been appointed by the president. In response to the protests in December, Medvedev introduced a bill in the Duma providing for direct elections again. But the question is: with what kinds of residual controls from the center and from the political authorities that would make it difficult for real challengers to get elected as governor?

But even aside from gubernatorial elections, there will be a whole raft of regional, legislative, and municipal elections, where opposition figures are likely to be pretty successful over the next year or two.

There are many unpopular governors; at least eight of them have resigned since the parliamentary elections in places where United Russia didn't do very well. The political establishment is trying to improve its competitive position, and they're very attentive to the ground rules that will govern elections. But even aside from gubernatorial elections, there will be a whole raft of regional, legislative, and municipal elections, where opposition figures are likely to be pretty successful over the next year or two, so there's a real chance that in Russia over the coming period, you'll have more competitive politics.

On May Day [May 1], some 150,000 trade unionists marched through Red Square. What was the impetus for this?

They are being recognized as Putin's new base. Putin made his comeback, such as it was, in the presidential election by showing that he had a strong base in rural areas, among the working class, and this march was a kind of recognition of what trade unions had done for him in organizing the big pro-Putin rallies that we read about. Putin found that he could appeal to these constituencies with a kind of anti-Western rhetoric, with an appeal to the strength of the state, and on May Day he was saying "thank you."

It was an interesting scene, though. He and Medvedev walked with all these trade union leaders down Tverskaya Boulevard in Moscow to Red Square. This is often referred to as Moscow's Fifth Avenue. It's the site of all of these extremely high-end, expensive shops that none of the trade union folks can really afford to shop in, except the leadership, and yet Putin has managed to solidify his support among people who have done the least well during his tenure. His support is shakiest among people who've done best during his tenure.

It's true that the big protest rallies in the winter were seemingly led by Moscow intellectuals.

The protests were regarded as a middle-class outpouring of opposition to Putin. The polls showed that 8 percent of those attending the biggest demonstration considered themselves working class.

Putin made his comeback, such as it was, in the presidential election by showing that he had a strong base in rural areas, among the working class, and this march was a kind of recognition of what trade unions had done for him in organizing the big pro-Putin rallies that we read about.

There was an interesting poll last week that showed that only 16 percent of Russians expect Putin to pay attention to middle-class interests in his next term.

What about relations with the United States? Putin's been hot and cold with Washington.

Putin has definitely used the United States as a whipping boy in his political rhetoric over the past several months. He's not turning to that rhetoric for the first time; it was a favorite theme of his in the 2007-2008 electoral cycle also. But the question now is: How much will he stick with anti-American policies as opposed to rhetoric?

The indications are mixed. In his recent speech to the Duma, he said some rather flattering things about NATO as a force for stability in central Asia. Recently, the Russian line on Syria has grown a little bit softer. He is eager for the United States to offer a "graduation" of Russia from the terms of the Jackson-Vanik amendment. He and his people have invited senior American officials to Moscow this week for a review of relations.

Just as every Putin term has been different, we can't be so sure of where things will end up with him. There are, in addition to these more positive overtones, the usual areas of disagreement. The Russians are still very opposed on the issue of missile defense. They are extremely critical of what they see as interference in their domestic political affairs, so it'll be a while before we see what the main theme of Putin's policy will be.

What is the status of Jackson-Vanik?

Russia is going to be joining the World Trade Organization as a full member in the next couple of months, but the United States, because of the Jackson-Vanik amendment, will not actually be able to tell the WTO that it has granted Russia Permanent Normal Trade Relations (PNTR). So Congress has to vote for what's called "graduation," and the administration has said that getting graduation is its top trade priority now, and it's been collecting some support this week. Congressman Dave Camp, who's the chairman of the House Ways and Means Committee, expressed strong support for immediate graduation.

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