#3
RFE/RL Newsline
May 22, 2003
HOW MUCH CHANGE DOES PUTIN SEEK?
By Peter Lavelle

Russian President Vladimir Putin's annual address to the Federal Assembly on 16 May was in many ways reminiscent of those he delivered in previous years. Some commentators even likened it to Soviet-era reports to plenums of the Central Committee of the Communist Party. Neither observation is wholly untrue, although both focus on form and overlook what made this year's address different and important.

Those who expected Putin to repeat statements he made in his two earlier such annual addresses were not disappointed. There was the traditional assessment of achievements and disappointments -- but this is the whole point such addresses. Putin also pointed out that the authorities have moved closer to resolving numerous problems that not long ago were considered intractable.

Among the cited achievements were the adoption of new civil, criminal, labor, and land legislation, all replacing laws inherited from the Soviet Union. Putin also drew attention to the fact that the political, legal, and economic woes of a few years ago no longer threaten the country's stability.

As with Putin's first two annual addresses, considerable attention was devoted to Russia's positive macroeconomic indicators. The gross domestic product has grown by 20 percent over the past three years, the export of machinery is up by 70 percent, fixed investments are up a healthy 30 percent, and real incomes are up 32 percent. Putin also announced the ambitious goal of doubling Russia's GDP by 2010. Putin also proudly pointed out that for the first time in a half century, the country has become a net exporter of agricultural products.

Putin's criticism that Prime Minister Mikhail Kasyanov's cabinet is not implementing administrative reforms quickly enough could have been taken entirely from last year's address. The president iterated that Russia's macroeconomic fundamentals remain fragile in the absence of any "consolidating" of the reform efforts of the past three years. He called on the cabinet to intensify efforts to stimulate the economy. All reforms of the pension, tax, and communal-housing systems must not only continue, but must be speeded up significantly, he said.

Putin also berated the cabinet for its inability to reform the state bureaucracy, identifying this failure as the primary obstacle to achieving strong and sustainable economic growth. He further deplored the fact that in the process of implementing administrative reform, the government is not moving quickly enough to reduce the size of the state bureaucracy.

Putin's comments on military conscription disappointed many. He again expressed support for the goal of gradually shifting to a professional army, but, interestingly, appeared to be satisfied with the pace of the reform of this branch of the armed forces.

Despite its similarities to the previous two addresses, this year's address was appreciably different in a number of ways. It was not merely a catalogue of the achievements and disappointments of the past year or a policy-agenda proposal. It was also an election pitch that summed up Putin's achievements as president thus far. Few actually expect Putin to campaign during his re-election bid early next year -- an election he is widely expected to win. This year's address to the Federal Assembly is his last during this term of office and, as such, might turn out to be his first and last campaign speech.

The address was also a clear attempt to influence the December Duma elections, the outcome of which is more difficult to predict than that of the presidential election in March. The president sought to rise above Russia's political divisions with an eclectic appeal to support both liberal and patriotic values. He strongly asserted his support of private enterprise and making the ruble fully convertible, thus appealing to the parties on the right, while calling for only modest consumer-rate hikes for the so-called natural monopolies, an approach favored by the left.

The real bombshell in Putin's address has attracted curiously little comment. Putin condemned what he termed "intolerable levels" of "economic lobbying" and raised the hypothetical possibility that the next government could be based on a parliamentary majority. On the face of it, a government representing the majority faction in the Duma -- which would likely be Unified Russia -- should make the government more accountable and could reduce the bureaucratic obstructionism that has thwarted the Putin administration's most ambitious policies, including the reform of the bureaucracy itself -- to which Putin promised to give a new political impetus.

On the other hand, if during the Duma elections Putin throws his considerable political weight behind Unified Russia, the most loyal pro-Kremlin party, the entire democratic process will be short-circuited. With the Kremlin having tightened controls over the media, it is unclear whether parties on the right and the Communist Party will be given equal opportunities to present their platforms in the run-ups to the Duma and presidential elections. Others even foresee that switching to a Duma-controlled government at this juncture would only increase "economic lobbying" on the part of the oligarchs and position Putin to become a gray cardinal in Russian politics long after he has left the presidency.

Putin also spoke at length about Chechnya, but here too his approach differed from that of past addresses. Suppression of armed Chechen "terrorism" is the policy with which Putin launched his national political career four years ago and for which he therefore bears enormous personal responsibility -- with the gruesome Moscow theater hostage crisis in October underlining his political vulnerability on this front. Putin implied that the Kremlin is seriously considering a political settlement in the troubled republic. With less than 12 months to go before the presidential election, progress or lack thereof in resolving the Chechen conflict could become a key campaign issue.

Putin's address this year was not much different than in years past, and it was also not much different from what we should have expected, given Putin's public persona. Putin is hard to read, a trait that generally works to his advantage and is probably purposefully cultivated. However, a careful reading of his words sheds light on how this enigmatic president is navigating his county's present and future. Those who expected the address simply to repeat the first two should be pleasantly surprised that a subterranean desire for change still exists in Putin's Russia. However, exactly how much change has now become the most burning question.

Peter Lavelle is a Moscow-based analyst and author of the weekly e-newsletter "Untimely Thoughts" found at http://www.untimely-thoughts.com.

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