Zee Beam News

October 26, 2005 Prime-TASS - The powerful centralized system of government that has been created by President Vladimir Putin means that the outcome of the 2008 Russian presidential elections will play a vital role in determining the course Russia may take. The elections offer the promise of continued stability for eight more years, but a miscalculation by Kremlin power brokers during the run-up to the election has the potential to destabilize the country, analysts said. "I would say with almost full control over politics the Kremlin can organize any scenario it wants to in 2008, the question is whether or not the it will be able to ensure that the transition will proceed smoothly," Masha Lipman, scholar-in-residence and political analyst with Carnegie Moscow Center, said. "There are conflicting interests among both the Kremlin power groups and their clients outside the Kremlin. Whether a new balance can be achieved fluidly is the biggest question. Any type of (government) restructuring risks upsetting the balance," she added. The centralization of authority in the Kremlin makes the 2008 presidential elections at least as important as those which saw power transferred from Boris Yeltsin to Vladimir Putin in 2000, Roland Nash, chief strategist at Renaissance Capital, said. "The next president will inherit a system where there are far fewer checks and balances to the generation and legislation of policy," he said. "The possibility for political input elsewhere in Russia's system is limited by the concentration of authority in the Kremlin." Indeed, it is that concentration of authority in the Kremlin that has come under attack by critics from the left and the right. Putin's critics say that he had created a non-transparent political system in which all significant decisions depend on his own will and a close circle of friends and loyalists who are not public figures. In the meantime, he continues strengthening his "vertical of power." Both chambers of the Russian parliament are now under almost total control of the Kremlin. "During the 1990s, for the first time in Russian history, the firm grip of the state over Russia was loosened. In fact to such an extent that the government became inefficient and unable to fulfill its functions," Lipman said. "Putin proclaimed that he would undertake to consolidate the state, a legitimate task. But while the task was legitimate, the way he went about it was not by strengthening institutions, but by re-centralizing power in the Kremlin and making them irrelevant," she added. However, other analysts argue that a strong central authority is necessary to maintain Russia's stability and is keeping in line with Russia's history throughout which a centralized system of power existed, first under the tsars and later under the Communist Party. The current system was conceived not as a tool of the ruling elite, but to ensure a stable political and economic climate that is capable of bringing prosperity to the entire country, one analyst said. "This is the system that has historically existed in Russia and Putin and his allies believe that this is the only way Russia can be governed," Michael Heath, political analyst at Aton Capital, said. "There exists a uniform view that Russia should be governed through a vertical system of power. It is true that Putin's allies have benefited (from the centralized system), but the system wasn't created with that goal in mind. Rather, that was simply one of the results of the system's creation." But others vigorously disagreed. "I am not the only one who believes (this system was created for the benefit of the president and his allies)," Lipman said. "There was a recent survey (of Russian public opinion conducted in spring 2005 by Levada Center), in which 83% of those surveyed expressed the opinion that the Russian government is a close circle of people who only care about there own interests." Whether the current system of government can indeed bring prosperity and stability to Russia will likely in part be determined by the outcome of the presidential elections. A transparent, constitutional transfer of power would add a new layer of stability to Russia's political institutions, Nash of Renaissance Capital, said. "(It is my opinion) that Putin wants prosperity and stability, and has built a system of highly centralized control because he believes it is needed to push Russia in that direction and to protect it from slipping towards one of its two historical norms of chaos or totalitarianism," he said. But Nash warned that the same system is ironically the greatest threat to Russian democracy. "Unfortunately, the single major threat to Russia's stability and prosperity is that the system built by Putin could be used to push Russia toward the authoritarianism and state bureaucracy that could undermine the current promise of prosperity," he said. Historically, several countries have achieved strong economic growth under the guidance of a powerful central government. China is the most notable example, but the Chinese example is not feasible for the Kremlin as Russia and China are different in so many ways, analysts said. "Economically, they have hardly anything in common," Lipman said. "China is competitive on the world market and has been increasingly incorporated in the global economy, Russia can barely produce anything competitive except for raw materials. China's very strong advantage is cheap labor which is not the case in Russia. In my view, even though Russia may still have more freedom, the two countries are moving in opposite directions politically, China is gradually opening up while Russia is becoming more authoritarian," she added. However, the presence of a strong central government in post-Soviet Russia could have eased the painful transition to a market economy, Heath of Aton Capital said. "I think there is a lot of respect (in Russia) for the Chinese example," he said. "People wish the Soviet government had opted for gradual economic reform and avoided the political and economic upheaval that took place. The Chinese model would have been a much better model for Russia in the late 1980s. On the other hand in China you have absolute state censorship and a complete monopoly on power in the Communist Party and no one (in Russia) is advocating a return to a totalitarian state." Analysts declined to speculate on who exactly will become Putin's successor, but said that person will almost certainly have close ties to the Kremlin. In the case a successor is hand-picked by Putin, that person will almost certainly become Russia's next president, analysts said. "The most likely outcome is a compromise candidate, supported by all factions within the presidential administration," Nash of Renaissance Capital said. "Such a candidate would have little difficulty in getting elected but would find himself with less room for maneuver as president than Putin." While opposition political parties have been effectively marginalized, there still exists the potential for fierce competition between the rival power groups in the Kremlin as each jockeys for position before the elections. The Kremlin is often characterized as split between two interest groups with the relatively liberal progressives led by Head of the Administration Dmitry Medvedev on one side and the "siloviki," or representatives of the security forces, led by Igor Sechin, Medvedev's deputy, on the other side. "Simply because political conflict is no longer enacted in public does not mean to say that there isn't any," said Nash. "The occasional surfacing of politics into the public domain has indicated that there is plenty of disagreement within the Kremlin. "While policy creation without conflict can appear more stable, the absence of scrutiny and debate can result in poor policy. When there is little open debate, there is a danger that poorly designed or poorly constructed policy can become law," he added. The name of any successor will almost certainly remain a secret well into the run-up before the presidential elections in order to avoid political infighting in the Kremlin and assure a smooth transition of power, analysts said. "Conflict between the Kremlin factions is unlikely," Heath said. "Any person favored by Putin will be hidden until the end of the summer in 2007 and there will be no time to mount any type of opposition to the anointed successor. The faction will have no choice but to get behind the candidate and it would be very risky politically to oppose him with so little time to discredit or challenge him." Putin is constitutionally barred from running for a third term and has said repeatedly he will not seek to change the constitution in order to run for a third term. While Putin may intend to step down from the presidential post in 2008, it is unlikely he will stray very far from the Kremlin, analysts said. "At this point I tend to believe that he will step down in 2008, as he has repeatedly pledged," Lipman said. "Yet, I wouldn't rule out one hundred percent that he might change his mind forced by circumstances. If he does step down, he'd remain "in the ranks" as he said himself, that is will remain a key figure in the Russian power loop." In fact, Putin will probably remain one of the most powerful and influential people in Russia well after the 2008 presidential elections, analysts said. "Putin is likely to maintain a major role possibly as Prime Minister, possibly as the head of the state-owned oil and gas monopoly (Gazprom), and more likely as the leader of the largest faction in parliament (United Russia)," Nash said.