Vladimir Putin appeared to have caught much of Russia’s ruling elite off guard when he fired the entire government on Jan. 15. With implementation of Putin’s much-prized national projects by the government in trouble and real incomes declining year after year, it was, perhaps, only a matter of time before Russia’s ultimate decision-maker was to sacrifice someone from the government’s socio-economic bloc. However, few Kremlin insiders expected Putin to fire not only all the ministers, but also the premier (and one-time president), Dmitry Medvedev, with more than four years still left in Putin’s fourth term. Yes, Medvedev has been chronically unpopular, but some Kremlin watchers thought that the loyal premier would only be axed sometime closer to the end of Putin’s fourth term to please the public ahead of a reconfiguration of power in Russia in 2024.
In May of that year, Putin’s fourth presidential term expires and, sometime before that, Putin needs to decide whether to amend the Russian Constitution and stay on in the Kremlin or whether to pick a successor and relocate to the White House—the premier’s residence—while expanding his powers at the expense of the next hand-picked president. Other options Putin has reportedly entertained include becoming the head of the Russian-Belarussian Union state or transforming Russia’s State Council from a consultative body into an executive body, expanding its powers and staying on as its chairman. Of these four posts, the second (become an empowered premier) and fourth (stay on as an empowered head of the State Council) seem more likely to appear on Putin’s resume in 2024 following Putin’s annual address to both chambers of the Russian parliament, which Putin delivered on the same day he fired Medvedev. In the address, he stated “it would be appropriate to fix the status and role of the State Council in the Russian Constitution” and called for transferring the right to name the premier and most of his ministers from the president to the parliament. He also said he supported a “constitutional provision under which one person cannot hold the post of the President for more than two successive terms.” It is ultimately immaterial, however, in my view, which of the options Putin may choose as the address has made it crystal clear that no matter what title(s) he ends up with, Putin has no plans to stop steering Russia after his fourth term expires.
In addition to signaling his intention to stay at Russia’s helm, Putin’s address also reaffirmed the proposition that while he continues to favor economic modernization (e.g. his call for technological innovation, greater investment) for the sake of improving Russia’s competitiveness, raising living standards and reversing renewed depopulation, the 67-year old ruler has no intention of either liberalizing Russia’s political life or scaling down his efforts to limit other countries’ ability to influence domestic politics in Russia. That follows from Putin’s actions enshrining the supremacy of domestic legislation over international law in what would allow Russia, among other things, to ignore the rulings of the European Court of Human Rights, which often rules against Russian authorities on cases involving violations of human rights. It also follows from his proposal to ban Russia’s civil servants from holding foreign citizenship or residency, and from extending the residency requirements for presidential candidates from 10 to 25 years. The address has also demonstrated that Putin continues to view brandishing Russia’s newly-developed arms to be a useful tool for conducting policy vis-à-vis the West, though this time the saber-rattling was not as loud as in the two previous presidential addresses.
Paradoxically, perhaps, the advice that Putin receives on Russia’s stance toward the West may become a bit less hardline in the wake of the entire government’s firing. The reason behind this is that Medvedev’s next job will be serving as Putin’s deputy in the Security Council, which advises the Russian leader on the country’s foreign policies, among other things. This council is dominated by hawks, and the arrival of Medvedev, whose presidency featured a reset with the U.S. and the conclusion of the New START Treaty, may soften some of the advice it gives Putin on how deal with West. The impact of Medvedev’s advice would still be limited, however, given how much foreign and defense policy decision-making has been concentrated in the hands of the man who is Russia’s longest-serving ruler since Stalin. As for Medvedev’s own fortunes, his loss of the premier post to Mikhail Mishustin has significantly diminished his chances in the race between Putin loyalists vying to be picked as the successor in the Kremlin, despite the fact that Medvedev once won that race, serving as Russia’s third president from 2008 to 2012 before returning the post to Putin.
Regardless of who will be Russia’s president, premier and chairman of the State Council in 2024, my bet is that they will still be facing the same structural problems that have been impeding Russia’s development for years. Russia cannot hope to revive the growth rate of 7 percent or more that it enjoyed early in Putin’s rule unless its economic growth model, which relies on energy exports, is rebuilt. That requires not only liberalization in the economy, where the state’s share has been estimated to reach 55 percent, but also improving the quality of public administration and enforcing rule of law to minimize wide-spread corruption. This includes the sweet deals that some of the nation’s monopolists reportedly hand to companies controlled by some of Putin’s close friends and the law-enforcement officers who extract so many bribes from private businesses that they could qualify for Forbes’ list of richest Russians, if their fortunes were legal. (My calculations show that Interior Ministry Col. Dmitry Zakharchenko, who headed the agency’s anti-corruption department, was worth up to $460 million as of 2016, which would have made him number 172 on Forbes’ list of Russia’s richest that year, just below Mikhail Khodorkovsky). Putin has successfully hoarded tens of billions of dollars to try to finance national projects meant to turn Russia’s economic, technological and socio-demographic fortunes around, but that won’t happen in a corrupt, non-competitive and badly governed environment. No calls for technological modernization, increased private investment and, ultimately, reviving economic growth at rates above the global average—all of which Putin made in his Jan. 15 address—will be heeded while private entrepreneurs continue to face prospects of losing bids to politically connected rivals or even having their businesses seized from them by venal law-enforcers, sometimes with the help of corrupted judges. Ultimately, increasing competition would be beneficial for not only the country’s economic sphere, but also its political life. Putin’s proposals to transform Russia from a super presidential republic into a country where the parliament has a more substantive say would avail Russia if the elections there were free and fair so that the parliament was not largely populated with Kremlin yes-men, but instead had real opposition capable of providing some real checks and balances on the executive power.
Putin is rumored to prefer dealing with foreign policy issues, where the Kremlin has proved itself to be a skilled player, while finding structural socio-economic problems at home too boring to continuously focus on. However, unless these problems are solved, he or his successor will continue to confront the reality that Russia, with 3 percent of the world’s GDP and 2 percent of the world’s population, remains too far behind the United States and China economically and demographically to be a true peer to these countries in the changing global order.
Simon Saradzhyan is the founding director of Russia Matters. The opinions expressed in this commentary are solely those of the author.
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