FT interview: Dmitry Medvedev, Moscow’s enigma
By John Thornhill, Neil Buckley and Charles Clover
Published: June 19 2011 22:37 | Last updated: June 19 2011 22:37
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| Gesture politics: the president’s reformist vision appears, rhetorically at least, increasingly at odds with the approach of Vladimir Putin, his predecessor and former boss |
Though he has been in office for three years, Dmitry Medvedev remains a political enigma even in a country so rich in mind-muddling mysteries.
Russia’s 45-year-old president is evidently in power, yet remains strangely removed from it. He is responsible for running the biggest country in the world, yet seems to exercise limited control over it.
EDITOR’S CHOICE
To his critics, he is the politically impotent occupant of a constitutionally omnipotent post, elected by the majority of Russia’s 109m voters but answerable to only one: his mentor, friend and former boss, prime minister Vladimir Putin.
The most widely accepted theory in Moscow has it that Mr Medvedev will soon announce plans to step aside and allow 58-year-old Mr Putin to take up the presidency for the third time in May 2012, having observed the constitutional propriety of not serving more than two consecutive terms. In this view, Mr Medvedev is a presidential seat-warmer, a convenient but inconsequential cypher who will amount to little more than a curious subclause in Russian history.
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Yet in an hour-long interview with the Financial Times, in the exhibition centre in his home city of St Petersburg at which last week’s International Economic Forum took place, Mr Medvedev gives the strong impression that he has not read this script. Not only does he say he wants to serve a second presidential term – while making clear this does not necessarily mean he will run – he also spells out a compelling programme for the modernisation of Russia, embracing free markets, deeper international integration and the extension of his nation’s highly circumscribed democracy.
The president warns that the country risks another collapse if it reverts to isolationalism and inertia following the elections. But, while the political uncertainty persists, Russian investors have been sending money abroad and foreign businesses have shied away from major investments.
“In some countries there is a rather successful co-existence of market-oriented economies and limited political competition,” he says. But, he insists: “This is not for us. In the absence of political competition, the fundamentals of a market economy start to fall apart.”
REFORM AGENDA
● Improve corporate governance and investment climate; remove ministers from boards of state companies
● $30bn privatisation drive to shed state stakes (including controlling ones) in some big corporate groups
● Focus on high technology, symbolised by new Skolkovo centre aimed at attracting foreign investors
● Create an all-volunteer army
● Cut police from the current 1.4m
● Slim the bureaucracy by hundreds of thousands of workers
Mr Medvedev is certainly a very different type of Russian leader to any who has gone before. Calm, unfussy, engaging and markedly more self-assured than when the FT interviewed him last in 2008, he seems happy in his own skin and fully at home in the digital world, whipping out an iPad – on request – to talk about his favourite software applications. Angry Birds, the mobile game, is not among them, he jokes, but they do include an app for checking in real-time the implementation of his presidential instructions. “The iPad is a very convenient tool,” he says.
In the interview, Mr Medvedev emphasises his close alignment with Mr Putin, remarking that they share a native city, legal training, career path, political orientation and world view. “To say there is a growing gap between us would be absolutely inappropriate,” he says.
Yet in his recent public pronouncements, Mr Medvedev appears increasingly at odds with his predecessor – rhetorically, at least. In his interview with the FT, he projects a vision for Russia that diverges from Mr Putin’s in at least three important respects.
First, Mr Medvedev presents himself as a fierce critic of the “state capitalism” that became the hallmark of Mr Putin’s presidency, advocating instead a radical reduction of the government’s role in the economy. Mr Medvedev accepts that the Kremlin had to intervene in the economy following the post-Soviet chaos of the 1990s but argues that the state is now stifling the private sector, warning of the danger of a return to Brezhnev-era stagnation. State officials – or “werewolves in epaulettes” as he sometimes calls them – are draining the blood from the dynamic forces in the economy. Corruption has become endemic.
Mr Medvedev recently removed powerful ministers from the boards of big companies, such as the Rosneft oil group and VTB bank, to limit political interference in the economy. He has also fired Yuri Luzhkov, Moscow’s veteran mayor, for “loss of trust”. But he says he wants to move a lot further if re-elected. He would accelerate the privatisation programme, selling off controlling stakes in some of the most important state-owned companies.
In a speech to Russian and foreign business leaders at the forum last week, he also trumpeted other measures to disinfect the notoriously mucky business climate. Emphasising the creation of a version of Silicon Valley by forming a technology hub at Skolkovo, a village near Moscow, he also hailed the establishment of a $10bn foreign direct investment fund aimed at enticing private equity groups and sovereign wealth funds to co-invest with the state. “Markets, like parachutes, only work when they are open,” he told investors.
RELATIONS WITH AMERICA AND EUROPE
A ‘good cop, bad cop’ routine that has won handy favours from the west
Three years into his term, Dmitry Medvedev has staked his presidency on better relations with the US – eating hamburgers with President Barack Obama last June and pumping iron with Arnold Schwarzenegger during a visit by the then California governor to Moscow in October, write Charles Clover and Quentin Peel.
The Russian president is seen as vital to the delicate rapprochement with the west – known as the “reset” – after relations sank to a post-cold war low during the August 2008 conflict in Georgia.
Wary of a return to office in 2012 by Vladimir Putin, former president and now prime minister, the US and the European Union have been striving to support Mr Medvedev politically as a counterweight to his former mentor, who is still seen as the more powerful of the two men. The pair are this year expected to decide among themselves who will be Russia’s next president.
Analysts say Mr Medvedev is unlikely to have pursued the reset without Mr Putin’s agreement. Nevertheless, were Mr Putin to return to the presidency, his confrontational style and anti-western views would be likely to hinder bridge-building efforts.
US officials say privately that the chemistry between the relatively liberal Mr Medvedev and Mr Obama is one of the main ingredients in the reset. “Medvedev is the natural interlocutor for President Obama given his position,” says Andrew Kuchins of the Center for Strategic and International Studies in Washington. “But I do not think the administration in Washington has any illusions that Medvedev is doing anything significant in relations with Washington that Putin does not implicitly or explicitly support.”
A Putin return could hurt Mr Obama’s own re-election effort in 2012, he adds. “If Putin comes back as president, and the US-Russian relationship deteriorates quickly, that will not be helpful for Obama in an election campaign.”
The US is not alone in being keen to bolster Mr Medvedev as a relatively pro-western hand on the tiller of foreign policy. For instance, a US state department cable from February 2010, released by Wikileaks, tells of a conversation with a senior French foreign ministry official who “described the long-standing French effort to strengthen Medvedev by respecting his official role as president of Russia, regardless of Putin’s competing power and influence”.
Germany, as Russia’s most important European partner, has also set its hopes on Mr Medvedev, although he has disappointed Berlin in his failure to deliver more reforms. Angela Merkel, German chancellor, publicly backed his “modernisation” drive last year and pledged support. Since then, there has been little progress in terms of investment or institutional reforms.
Analysts say that while the Medvedev-Putin “tandem” may not have been designed as such, it has been a very successful foreign policy tool, inducing the west to do policy favours for Mr Medvedev.
“It has been a very effective ‘good cop, bad cop’ routine,” says Alexandros Petersen, an adviser to the Woodrow Wilson Center, a US think-tank. “But it’s increasingly clear that the potential to split them does not exist, if it ever did.”
Dismissing the global trend towards re-regulation following the 2008 financial crisis, Mr Medvedev argues that for Russia further deregulation is urgent. “The economy must be self-regulated,” he says. But he admits one of the main obstacles in implementing his promises is the mentality of bureaucrats, who must understand that they can no longer boss around businesspeople who create jobs.
“Our main enemy is inside us,” he says, characterising those who resist reform. “For a variety of reasons people in this country invested all their hopes in the kind tsar, in the state, in Stalin, in their leaders, and not in themselves.” Signing decrees, Mr Medvedev acknowledges, will in itself do little to change that.
What alarms him, he says, is that young people want to become bureaucrats – and not necessarily because it is an interesting profession. When his parents went to college in Soviet times, everyone wanted to be an engineer, he says. When he went to college, his generation all wanted to be lawyers, economists or businesspeople. But today a worrying proportion of students see the potential for “other sources of income” as a state official. “That is a very dangerous trend,” he warns.
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The second area of difference between Russia’s two leaders is political. While Mr Putin’s Kremlin developed a system of “managed democracy”, Mr Medvedev argues for a far more competitive and decentralised form of politics.
He says the rules governing parliamentary elections should be changed to ensure a far broader representation in parliament of the political spectrum, from communists to liberals to rightwing parties. He also, for the first time, suggests that at some point it would be sensible to re-introduce gubernatorial elections to allow people in the 89 regions a greater say in how their lives are run. “I don’t think this is a question on the agenda for today or tomorrow. But this question is not closed,” he says. Removing direct elections for regional governors in 2004 was one of the key steps in Mr Putin’s centralisation of power.
A complete overhaul of the judicial system is also needed to counter corruption and strengthen confidence in the rule of law, he says. But he refuses to intervene in the case of Mikhail Khodorkovsky, the jailed oligarch. The former boss of Yukos, the oil group, was recently declared a prisoner of conscience by Amnesty International after an existing jail term was was extended because of a conviction on new charges of embezzlement. The court’s verdict, says the president, must be respected.
The third point of differentiation between the president and his predecessor appears to be ideological. While Mr Putin is a product of the Soviet system in terms of his mindset and political reflexes, his protégé was 26 years of age when the Soviet Union collapsed and has spent most of his adult life in the post-Soviet world.
Mr Medvedev firmly disagrees with Mr Putin’s famous claim that the 20th century’s “greatest geopolitical catastrophe” was the collapse of the USSR. “The collapse of the Soviet Union was almost bloodless,” he says. “I cannot agree with that point of view, although it is a very difficult and grave event for many people.” The second world war and the post-revolutionary civil war, which together left tens of millions dead, were far worse, he concludes.
He shows little nostalgia for the Soviet era, arguing that there has been remarkable progress since 1991 – even if it is less than people hoped. He describes Russians of his own age, who straddled the Soviet and post-Soviet periods, as probably the “happiest generation” because they are able to appreciate how far the country has travelled since the era of empty shop shelves.
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However, there are a multitude of reasons to doubt that history will unfold as the president desires. Should Mr Putin decide to run, there would appear to be little Mr Medvedev could do to dissuade him. He rules out the possibility that they would run against each other, in spite of his calls for more open political competition.
Even if Mr Putin allows Mr Medvedev a free run as the Kremlin candidate, there are doubts about whether his agenda will appeal much to the average voter. Many voters and analysts point to his patchy record in implementing his reform agenda during his time in office.
Mr Medvedev argues that he helped steer Russia through the turmoil of the global financial crisis, kept a lid on unemployment and stoutly defended the nation’s interests in the 2008 war in Georgia. The economy is growing at a rate of 4.5 per cent a year, which may be slow by Chinese or Indian standards but outstrips the US and Europe.
But one veteran Russia-watcher says Mr Medvedev’s new-found liberal rhetoric on the economy – particularly his call for further privatisations – would appeal to no more than 15 per cent of the electorate.
Even if he is re-elected, Mr Medvedev will surely struggle to implement his programme. There are many competing poles of power in Russia, including several mighty financial-industrial clans with vested interests to protect, which will resist many of the main elements. It is noteworthy that although the president has succeeded in removing ministers from the boards of big companies, their replacements have proved anything but independent.
Some observers have suggested that a re-elected Mr Medvedev would bear an uncanny resemblance to a latter-day Mikhail Gorbachev, wishing to reshape the system but inadvertently undermining the foundations of the regime.
In western democracies, Mr Medvedev says, it matters far less who holds power because the rules governing their economies and societies are so deeply embedded. But that is not yet true in Russia, he laments.
The intrigue surrounding the presidential elections highlights how far Russia still has to go – 20 years after the disintegration of the USSR – before it can join that fortunate club.
Additional reporting by Catherine Belton
Copyright The Financial Times Limited 2011.
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