The assessment of President Medvedev’s four-year rule in the Kremlin
Issue:
May 2012, Vol.7, No.5
Tags:
Medvedev
Almost all the analysts assessing the performance report card of President Dmitry Medvedev’s four-year rule in Russia faced a big problem. This stemmed from the fact there was no clear-cut point of reference to judge from, as there was no demarcation line between the end of his predecessor’s job and the beginning of his own activities in the country’s highest political office.
For example, in the United States, the administration of President Barack Obama, which also came to power in the same 2008 as Medvedev’s, had an unambiguous timeline boundary that marked the end of the era of the predecessor, President George Bush, Jr., and the beginning of the new government’s era. This is a kind of benchmark for future job evaluation purposes. And, the fact that Obama and Bush belong to two different parties that oppose each other on all aspects of their nation’s socio-political, public and economic life, made the demarcation point, in other words, the exact time of ‘the fullness of absolute powers transfer’ in the White House, more noticeable.
Here, it is very important to note the emphasis on the phrase, ‘the fullness of absolute powers transfer,’ because today, even at the end of Medvedev’s term in the Kremlin, there is no consensus among experts on the exact amount of powers transferred by the predecessor, Vladimir Putin, the current prime minister, who also has since the March election become the nation’s president-elect. The latter also bears the informal title of the ‘senior partner’ in the so-called ruling political tandem and the ‘power vertical’ created by him as president in 2000-08, a term that eloquently emphasizes ‘who is the real chief in today’s Russia.’
This is while analyzing Medvedev’s performance, it is necessary to start from the fact that he did not even have his own team, as he simply inherited a kind of slightly reformatted ‘Putin's former cabinet, with the full preservation of all the key figures in their previous posts or such figures were relocated to new positions with almost the same administrative powers and functions. In other words, Medvedev did not only inherit a country ‘in a good working condition’ in the pre-crisis spring of 2008, when he took the oath of office, but also got an already ‘existing and functioning cabinet.’ The issue of whether or not he actually had a full control over this cabinet is another question, which is on a par with the other numerous issues demanding for no less demanding answers such as whether or not he really had complete control over all key official decisions taken in the Kremlin over this period, and over the whole country as a whole.
“While analyzing Medvedev’s performance, it is necessary to start from the fact that he did not even have his own team, as he simply inherited a slightly reformatted ‘Putin's former cabinet with the preservation of all the key figures.”
As there are no obvious answers to these and other questions, because no one really knows for sure how all the major decisions taken in the Kremlin under Medvedev were made, as well as the degree of influence over these important state resolutions from the ‘senior partner in the political tandem.’ Therefore, for fairness sake, Medvedev will only bear ‘collegial responsibility’ for all the failures and achievements ‘of his inherited cabinet’ in the past four years, together with all the high ranking officials, including Putin, who had played any serious role in the process of making such critical decisions.
Since there are no clear benchmarks to evaluate his activities, the above preamble is not only necessary, but also essential, for a comprehensive and objective assessment of the outgoing president’s performance. To overcome this obstacle, TRCW, like many other experts evaluating the president’s report card, has identified some indices, as a kind of baseline data, to assess Medvedev’s presidency. These obviously include demography, economy, notably, the dynamics of changes in GDP, national debt, etc. In addition, we also highlighted the administration’s declared priority policies such as the ‘Five Is Projects,’ which the president had personally called his government's top priorities in 2008, namely, infrastructure, investment, institutions, innovation and intelligence and the degrees of their realizations over the past four years.
First of all, we have highlighted the opinions on Medvedev’s performance by the pro-Kremlin experts, who by status, are required to show ‘slavish loyalty to the government’ in their assessments. Thereafter, we shifted the focus to the assessments of Medvedev’s performance by independent experts. The latter, being unaffiliated with the government or its business and political structures, are more likely to give more objective assessment of the president’s achievements and failures.
In the field of demography, the pro-Kremlin experts rated the president very high. one of these experts, Pavel Danilin, is a well-known political scientist and the editor-in-chief of Kreml.org, an Internet portal. In his publication, titled, “The facts and figures of the objective evaluation of Medvedev’s policies,” the expert emphatically proclaimed the Medvedev’s presidency "an explicit success" for the country. This was followed by copious statistics, some of which was used in this article.
Thus, according to Danilin, Medvedev can be given ‘the full five points’ — the highest scoring grade in Russia — for handling the country’s demographic crisis. “If in 2007, the number of new births stood at 1.61mln, this figure has grown over the past four to a much higher level in 2012,” Danilin said, attributing the largest role in this success to the national priority project, coded, “Demography,” which embodies a special program of state provision of direct financial incentives for having many children. This was done via the so-called “Maternity Capital,” which envisages a large payment for the births of the second and further children in a family.
Equally important is the fact the maternal capital is constantly increasing, as it is been indexed for inflation changes. For example, if the maternal capital at the time of adoption in 2007 totaled RUR250,000, the sum is expected to reach RUR365,000 at the end of 2012 and rise further to RUR420,000 by 2014. This is almost half a million rubles, a figure, which may not look so impressive in Moscow and other regional megapolises. However, in the so-called rural areas or “proper Russia,” even a quarter, and more so, a half a million rubles mean a clear-cut demarcation line between extreme poverty and normal life.
In the economy, Russia received a severe blow from what the Kremlin likes to call ‘the exogenous’ global crisis. Here, Medvedev, according to the pro-Kremlin experts, has proved to be a highly efficient anti-crisis manager, keeping the economy afloat during raging storms of global economic crisis, unprecedented volatility on the international financial markets and public confidence crisis in the world banking system. Although Russia's GDP fell from RUR41.2trln in 2008 to RUR38.7trln in 2009, but by 2010, it has shot up to RUR45trln. Since then, it has not slowed down its growth pace, with the pro-Kremlin experts expecting it to hit a record of RUR50trln in 2012. An impressive result, indeed, especially against the negative backgrounds of mass bankruptcies of sovereign economies in other European countries, most notably, the long-suffering Greece, Ireland, Iceland, and other members of the so-called group of problematic states, which has been given the repulsive English acronym PIIGS. The letters ‘P,’ ‘I’ and ‘S’ stand for Portugal, Italy and Spain, whose economies are currently tethering on the verge of sovereign defaults.
For reducing the nation’s public debts, Medvedev and his team, again, according to the pro-Kremlin experts, can be given a ‘solid four.’ References to the petrodollar billions accumulated in the so-called ‘cushion safety fund’ and sky-high commodity prices prior to and during the crisis as the real positive factors behind this glowing success are irrelevant. This is a befitting feat, with full merit for Medvedev. After all, Russia’s national debt, as at Sept. 1, 2011, was at a historical minimum level of $36.8bln, or less than 3% of GDP. By the way, this was also the lowest index in the world.
To put this development into perspective, suffice it to recall that Russia’s national debt in 1998 stood at a staggering 146% of its GDP. For comparison sake, the national debt of Germany, the EU’s main economic engine, stood at 72% of GDP in 2011. The fates of the other world economy leaders were and are still even worse. For example, the U.S. national debt exceeded 83% of its GDP; Italy’s was 116% of GDP and Japan’s stood at a record level of 218% in 2011 and still rising today.
Understandably, these laudatory assessments from the pro-Kremlin experts are in full consonance with the government’s official data with little or no alterations. However, unlike the pro-Kremlin gurus, most ordinary Russians, independent economic experts and political scientists did not notice any special achievements or gaping failures in Medvedev’s presidency. This is according to a survey conducted by the VTsIOM foundation and the data from numerous conferences devoted to the evaluations of Medvedev’s four-year rule in the Kremlin.
The uniqueness of the VTsIOM opinion poll was that the respondents were allowed to offer several answers to the question on the president’s achievements and failures. The results were truly impressive in their absolute negativism. Thus, almost half of the respondents, (about 47%), could not name any major achievements, whilst about a quarter (23%) flatly said there was no progress at all under Medvedev, and only a percentage of the respondents praised his work. Among the latter, the most striking achievements were in the social sphere (7%) and foreign policies (6%), notably, the 'Operation to force Georgia to peace.’ The other positive aspects of the president’s work were less noticeable. For example, only 3% saw positive results in the fights against corruption, reform of the Interior Ministry, etc., while fewer still, about 1%, noticed real improvements in his fights against crimes and terrorism.
“For fairness sake, Medvedev will only bear ‘collegial responsibility’ for the failures and achievements ‘of his inherited cabinet,’ together with all the high ranking officials, who had played any role in making such decisions.”
However, in contrast to sociological opinions, more professional and independent assessments were offered by the independent experts at the Economic Club of the FBK Company, one of the private auditing firms in Russia. In April, they subjected Medvedev’s presidency to a comprehensive analysis, musically titled, “The economic results of Medvedev's era: the dreams and sounds.” As the host, Igor Nikolaev, director of strategic analysis at FBK, took the floor first, where he used the dynamic changes in the key macroeconomic indicators during the Medvedev's presidency as a point of reference for his assessment. “If we consider the leading indicator of success in the economy, namely the size of GDP, Russia in the past four years had only shown a growth of 5.5%, which, in comparison with other countries, at least in the BRICS, can only qualify as a very modest result.”
In addition, Russia's positions in most globally recognized ratings have deteriorated over this period, the expert added. “Specifically, in the Countries’ Competitiveness Index, Russia fell to the 66th place in the 2010-11 ratings, compared to its 51st place in 2008-09,” he noted, calling Russia’s admission to the WTO in 2011, after almost 18 years of negotiation processes ‘Medvedev’s only greatest achievement.’
Taking the floor, Sergei Dubinin, the chairman of the VTB banking group’s Supervisory Board, drew attention to the fact that in the relatively successful, in terms of macro-economic background, the decade, the government had not been able to solve even the most basic economic problems. As an example, he cited the budget’s one-sided dependence on the commodity exports, “and in 2008 the country saw what can happen when the demand for these products decreases on the global markets.”
Dubinin also highlighted another problem, namely, the complete lack of competitiveness of the country and prohibitively low labor productivity in the economy in particular. “Russia over the past 100 years has not been able to reduce its backwardness from the more economically developed countries, as it has continued to trail behind in all respects, for example, remaining about three times less effective than most advanced countries,” the banker added.
The expert sees the solution of some of these hard-core problems in the active attraction of foreign investments and building of equity at home. However, there is also a big obstacle here, because to attract investments, the country needs to radically change the basic institutional framework of the economy since those existing today are not trusted by the citizens, talk less of foreign investors.
Natalia Akindinova, the executive director of the Development Center, an economic research foundation, noted that over the past four years, despite Medvedev’s liberal slogans, the role of the government and the dependence of citizens on the state budget have substantially increased. “Before the crisis, the proportion of people, whose income depended on the budget stood at 20%, but today, after the crisis, this figure has grown to almost 30%. There is also an increase in ‘the state’s excessive presence in the economy, in particular, and society as a whole.”
There has also be an increase in the dependence of the private sector on the budget, especially after the global crisis had made it difficult for private companies to get foreign loans, a reality that has forced most corporations to focus on cooperation with the government and its budget as the only way for them to survive in these difficult times, the expert added. “The negative consequences of these developments include growth in monopoly, reduction of competition and rising inefficiency of the economy. In other words, liberal Medvedev has failed to actually positively influence the real processes in the economy.”
Nikita Maslennikov, the adviser to the provost of the Institute of Contemporary Development, called the most important adverse outcome of Medvedev’s presidency the ‘complete degradation’ of the oil and gas industry, and by extrapolation, the entire Russian economy. “If in the past, the energy sector was the "cash cow" that enabled the country to effectively solve many of its most pressing problems, but today, the this sector itself has become a big structural problem for the state,” he noted. “To reverse this negative, the government needs to inject almost $700bln into the industry between now and 2030, and these efforts will only be enough to preserve the current physical volume of production.”
Another problem that has openly defied the president is what the experts have called the ‘incarceration of the Russian economy in the 4% ghetto’ because this is not the pace that will enable the government to solve all its declared objectives on the country’s modernization agenda. According to economists, to achieve the set targets, the country needs, at least, annual economic growth rate of 5-5.5%, annual growth in labor productivity should of at least 10%, whist the volume of attracted investments should be larger than the current size by at least 30%.
Oleg Buklemishev, a senior analyst at MK-Analytics, while evaluating Medvedev’s presidency, focused on the declared “Five ‘Is’ Projects,” calling their realizations dismal. “The improvements in infrastructure have been mostly ‘ostentatious’ in form, and consequently, Russia was and still remains the undisputed world champion in terms of transportation accidents and other anthropogenic and technogenic catastrophes,” he added..
Foreign direct investments in Russia experienced an unprecedented decline during the crisis and so far have yet to return to their pre-crisis level, the expert said. Speaking about the government institutions, the expert rhetorically asked: our courts being run better today? And, speaking about innovations, the expert declared them “moribund and hence no positive signs over the past year.”
Speaking about the nation’s intellectual potential, Buklemishev noted that not even on of Russian educational institutions, including the famous Lomonosov Moscow State University, could make the Top 100 in the recent ranking of the world’s leading universities. “This is why we should not wait for any reformist impulses from the current or the new government that is coming to replace Medvedev, and, if there will be such impulses, they will not be at the place where they are really needed or the types that are actually required,” the expert said. “This means there is no hope for real changes, not in the so-called ‘Putin 2.0’ nor ‘Medvedev 2.0,’ in his new probable new role as Russia’s new prime minister. At least, judging by the government’s activities in recent years.”
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