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Trouble Ahead for the Tandemocracy

Interesting piece by Pavel K. Baev at Eurasia Daily Monitor today:

Berdimuhamedov apparently presumes that Gazprom is not what it used to be, while probably not reflecting much on the predicament of his own gas-centric mono-state. Gazprom is indeed so tightly integrated into Russia’s structures of governance that it is affected by the general economic downturn -even if the world energy prices have stabilized. Forecasts for the Russian economy are revised almost weekly -and invariably for the worse. The GDP decline in the first quarter has been corrected from 7.2 percent to 9.5 percent, so the Ministry for Economic Development now predicts a 6 percent contraction for the year (Kommersant, April 24). These macro-figures imply a 30 to 40 percent reduction in the state budget income, and if in the current year the government aims at minimal cuts in spending, covering the deficit from the accumulated reserves, by 2010 this policy will be unsustainable. Evgeni Gontmaher, an economist from the Institute of Contemporary Development that enjoys Medvedev’s patronage, argues that that the presidential address in May with the key guidelines for the 2010 budget -which must be presented by the government to the parliament by August 25- could be crucially important for Russia’s recovery from the devastating recession (Vedomosti, April 22).

Large-scale sequestration and cuts for every program will mean that the government has failed to identify its priorities and set Russia on a course of stagnation at the “bottom” of the crisis (www.gazeta.ru, April 22). That might suit the interests of some parts of the ruling bureaucracy, but will leave the populist demands unaddressed and the main pressure groups, from the siloviki to Gazprom, entirely dissatisfied. The ruling “tandem” is quite possibly incapable of making hard choices, as Medvedev’s vague ideas about modernization contradict Putin’s commitment to preserve key elements of his power system. This system of corrupt patronage and triumphant consumerism was perhaps organic to Russia in the period of petro-prosperity (Rossiiskaya gazeta, April 21). It is, however, simply not viable in the years of scarcity and survival-of-the-fittest -so the Russians are remembering Boris Yeltsin, who died two years ago, with a new respect for a leader that steered the country across a sea of troubles.