'Top Dog' and a Vengeful Harpy: The US Is Betting on Putin

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XXXXXX: Redacted by the editors. Important note on the dispatches...

<<241612>> 12/24/2009 9:30 09MOSCOW3109 Embassy Moscow CONFIDENTIAL 09MOSCOW2781 VZCZCXRO4998 RR RUEHDBU DE RUEHMO #3109/01 3580930 ZNY CCCCC ZZH R 240930Z DEC 09 FM AMEMBASSY MOSCOW TO RUEHC/SECSTATE WASHDC 5789 INFO RUCNCIS/CIS COLLECTIVE RUEHXD/MOSCOW POLITICAL COLLECTIVE RHEHNSC/NSC WASHDC RUEAIIA/CIA WASHDC TAGS: PGOV, PREL, PHUM, PINR, ECON, ETRD, KDEM, RS SUBJECT: SYSTEMIC REFORMS UNLIKELY WITHIN MEDVEDEV'S REF: MOSCOW 002781

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Sipdis

E.o. 12958: decl: 12/24/2018 Tags: pgov, prel, phum, pinr, econ, etrd, kdem, rs Subject: systemic reforms unlikely within medvedev's modernization agenda

Ref: moscow 002781

Classified By: ADCM Susan Elliott for reasons 1.4 (b) and (d).

1. (C) Summary: President Dmitriy Medvedev's high-profile campaign to modernize Russia appears designed to give Russia modest, mostly long-term, economic benefits without altering the basic economic and political structures that Medvedev inherited from Prime Minister Vladimir Putin. To the chagrin of some experts close to the President, the proposed changes are tactical in nature. If specific measures in Medvedev's agenda like enforcement of the rule of law, decreasing corruption, increasing transparency, building basic infrastructure, and protecting intellectual and property rights could be implemented, broad based growth could take place. Medvedev's desire to possibly run for re-election may be partially responsible for his push to modernize Russia and, unlike Putin, hold officials accountable for their actions in the aftermath of recent tragedies. Nonetheless, Medvedev's modernization drive provides US officials another potential hook for cooperation. End Summary.

------------------------------------ Modernization Tactical Or Strategic? ------------------------------------

2. (SBU) Medvedev's ability to change Russia is based upon his concept of modernization, which he and Putin have publicly defined in different ways. During his annual address to the Federal Assembly on November 12, Medvedev described modernization as a broad change of mindset and business practices, with the focus on developing medical, energy, and information technology, space and telecommunications systems, and increasing energy efficiency. He described Russia as a multi-party democracy (reftel), and also said that the country needed "comprehensive modernization," which would result in a more democratic, market-oriented, competitive country. Medvedev has continued publicly to discuss modernization and has met with various committees, government bodies, and the media to push his agenda.

3. (SBU) In his speech to the United Russia Congress on November 21, Putin emphasized the economic aspects of modernization and cited Medvedev's five key areas of focus. He specifically pointed out the need for modernization of industrial and defense enterprises, ports, and the pension system. Putin also noted that Medvedev's call to "overcome chronic backwardness" and raise the level of Russia's overall development reflected the mood of all of Russian society. Putin only mentioned modernization twice during his four hour televised call-in event on December 3, despite numerous questions about what the Government would do to improve Russia's economic situation.

4. (C) Medvedev's tactical measures for achieving success in the five defined areas could be achieved with minimal structural changes to the economy. Installing individual gas meters to promote less-wasteful use of fuel, changing to more energy efficient light bulbs, studying the effect of decreasing the number of time zones in Russia, and building more supercomputers could provide short to medium-term economic benefits. They would not, however, significantly change the structure of the economy or the murky political context in which businessmen and investors operate. Some contacts with whom we spoke have jumped on terms such as "comprehensive modernization" to suggest, perhaps optimistically, that modernization would include wholesale changes to Russia's economic and political systems.

----------------------------------- Some Prospects for Strategic Reform -----------------------------------

5. (C) Contacts have noted to us that modernization would lead to some targeted economic improvements, but, with a few exceptions, have expressed strong doubts about prospects for systemic reforms. xxxxx said on December 22 that the President might make some changes on the edges of the political system, but denied that Medvedev's reforms would have any major impact on Russia's political structure, which he said had been painstakingly formed over the last 15 years. Medvedev might make some significant reforms in Russia's economic structure, but would have to "non-violently enforce" modernization on the business elite, who preferred the status quo and who wanted to avoid making expensive investments.

6. (C) xxxxx

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told us December 7 that while various groups of elites have competing views on modernization, it was possible for Medvedev, with the Government's support, to overcome bureaucratic inertia and push through broad economic and political reforms. One key institution for Medvedev was the Commission on Modernization and Technological Growth of the Russian Economy, de facto led by First Deputy Presidential Administration Head Vladislav Surkov. Medvedev, xxxxx added, wanted to add influential elites to the commission, and meet with it more often in order to give it authority and provide an impetus to fulfill his modernization agenda. Some siloviki, however, such as Rostechnologia's Sergey Chemezov, have reportedly boycotted the commission.

------------------------------------- Modernization's Tactical Significance -------------------------------------

7. (C) Other analysts stated that Medvedev had no chance of changing the economic or political systems because he did not have the inclination, power, or buy-in of the bureaucracy to do so. xxxxx told us December 21 that they see little prospect for systemic reforms within the President's modernization agenda. xxxxx said that democratic reforms could be the spark that helped push through additional large-scale reforms, but he "unfortunately" did not anticipate Medvedev making any major improvements in the economic or political spheres. xxxxx told us that modernization was focused on economic policies and that Medvedev could make some quality improvements in the economy. xxxxx agreed, however, that reforms would have to occur within the current political system because it was an "illusion" to think that the President could overhaul the political system.

8. (C) xxxxx told us December 17 that Medvedev, who he half-jokingly characterized as Putin's Minister of Economics and Assistant on Cadre Policies, had no chance of modernizing Russia. Modernization, he added, was unlikely to increase Medvedev's public standing or his ability to increase his team's power.

9. (C) Longtime expert on political systems xxxxx said on December 10 that Medvedev was trying to make some tactical changes, but had no levers to implement systemic reforms. Russian bureaucracy had watered-down, stalled, or hindered reforms for hundreds of years, and would be successful in preventing any broad reforms. xxxxx added that while Medvedev's reforms sounded nice, the President would never significantly alter the political system and create a "true" democratic system. According to xxxxx Medvedev has benefited from the current political system, and any attempts to change the system would introduce a level of uncertainty reminiscent of former Soviet leader Mikhail Gorbachev. xxxxx also noted that the bureaucracy feared losing their privileges and would fight change through bureaucratic measures.

10. (C) xxxxx Public Chamber member, xxxxx bluntly stated to us December 9 that the President was not able to reform the political system. Medvedev could not implement his modernization agenda, which xxxxx saw as a positive program for Russia, because the President lacked the levers to make systemic reforms, and because of bureaucratic opposition. xxxxx characterized Medvedev as a "Manilov," in reference to 19th century author Nikolay Gogol's fictional character Manilov, who was known, as they described, for devising grand schemes, but failing to ever implement them.

--------------------------------------------- --------- Modernization Only One Part of Medvedev's Future Plans --------------------------------------------- ---------

11. (C) With Russia's presidential campaign season unofficially starting in about a year, many people with whom we spoke saw the present as pivotal for Medvedev's future if he wanted to prove that he could become an independent political leader. xxxxx said that the President needed to

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fulfill his promises, such as modernizing the country, to show all Russians that he can be relied upon to get things done. xxxxx said that the key question was when the tandem would divide, and that modernization was only one part of Medvedev's case to maintain the reins of power. The President had made other steps that differentiate his style from Putin's, such as holding senior regional officials responsible for their duties in the wake of the club fire in Perm that killed 150 people and the death of lawyer Sergey Magnitsky while in pre-trial detention, that might elevate his case.

------- Comment -------

12. (C) Modernization may not facilitate the structural changes to the political and economic spheres that some experts had hoped, but it could be another tool for Medvedev to demonstrate his leadership and, depending on his implementation and governing skills, introduce some uncertainty into the public and elite over his standing. Medvedev is finally challenging the low expectations and assessments of many experts after 19 months in office as Putin's junior partner. Medvedev has also refrained from challenging Putin's authority, control over day-to-day economic matters, or respect with the public and siloviki. Few currently doubt that the tandem member who will occupy the presidency in 2012 remains Putin's decision, but as the presidential campaign season approaches the risks and rewards for deviating from the tandem's stable relationship substantially increases for significant groups of elites with an interest in succession politics. Rubin

XXXXXX: Redacted by the editors. Important note on the dispatches...

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Sipdis

E.o. 12958: decl: 04/29/2018 Tags: pgov, pinr, econ, rs Subject: more from the rumor mill: reading putin's pre-inauguration signals

Ref: moscow 1187 and previous

Classified By: CDA Daniel Russell: Reasons 1.4 (b, d).

1. (C) Summary: Among some Kremlin-critics and establishment figures, speculation has grown over the past month that Putin and his entourage may be laying the groundwork for a return to the Kremlin, rather than safe-guarding the transition of President-elect Medvedev. While our contacts speculate that Putin has kept his political options open, some point to his self-conceived "historic mission" to return Russia to its former glory, concerns over a rapacious and self-devouring elite, and distrust of Medvedev's long-term ambitions as fueling recent maneuvers to further entrench the out-going president's powers. Acknowledging Medvedev's personal loyalty to Putin, observers point to competition among staff and rumors over Mrs. Medvedev's ambitions for her husband. Rumors notwithstanding, little of this speculation has a factual underpinning, but it does reflect continual nervousness among the elite about Putin's intentions and the fate of the tandemocracy. Putin's intentions and actions have rarely (if ever) been correctly forecast over the past year by Moscow's political elite. End Summary

Putin: Once and Future President? ---------------------------------

2. (C) Some Moscow politicians and Kremlin watchers are reading post-electoral and pre-inaugural political maneuvers (ref a) as signs of the possibility that Putin could return to the Kremlin, either at the end of Medvedev's term or -- in the event of underperformance or disloyalty -- before. As xxxxxxxxxxxx told the Ambassador, Putin's continued domination of political life, the focus on his transition to the White House (rather than on Medvedev's shift to Putin's Kremlin office), the possible creation of a Cabinet-like host of Deputy Prime Ministers, and Putin's decision to take up leadership of the ruling party, has fueled theories that Putin could be keeping his options open to return as President. Putin's xxxxx and others have stressed, is how to override the political predisposition that leads Russians to look to the Kremlin (whether to the Tsar or the General Secretary) for authority. As president, xxxxx argued, Medvedev's stature will be enhanced both constitutionally and psychologically.

3. (C) Acknowledging today's shift in political speculation away from the hypothesis that Putin would serve a limited period as Prime Minister in order to safeguard Medvedev's transition, xxxxxxxxxxxx argued that Putin's decision to lead United Russia was about protecting his own interests, and not those of Medvedev. Absent a pre-existing gentleman's agreement with the President-elect, xxxxx characterized Putin's choreography of the last several weeks as a "humiliation" of his successor. xxxxx told us that, based on blowback from Kremlin ideological guru Vladislav Surkov over critical xxxxx articles, it was clear to him that "Putin wants to be the leading guy." As an example of Kremlin sensitivities, xxxxx pointed to Surkov's quick intervention in the wake of an NG article that described Medvedev's prospective rule as a period of liberal thaw. Because the term "thaw" connotes Khrushchev's initial reign, xxxxx noted, it begged the question of "who was Stalin" and implied that change was needed, rather than the continuation of Putin's course.

Putin's Historic Mission, Internecine Clans -------------------------------------------

4. (C) Pointing to Putin's sense of historical mission in returning Russia to its previous world power status, analysts tell us that intra-elite divisions remain too poisonous and the prospect for elite conflict too great for Putin to remove himself from a power construct that he (and not a system of checks and balances) polices.xxxxxxxxxxxx questioned why Putin sought "dictatorial powers" over the party, given his preexisting de facto command of United Russia. His decision was "alarming," xxxxx claimed, because it demonstrated the uncertainty that exists in Putin's entourage over the political transition, despite the fact that "all executive powers will be shared between Putin and Medvedev" and the government machinery will be "as focused on Putin, if not more." xxxxx separately suggested that Putin's party leadership was an additional layer of protection should Medvedev become too confident with the presidential perquisites and seek to modify Putin's imprimatur.

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5. (C) As a long-time advocate of a third presidential term for Putin, xxxxx editor xxxxx told us that Putin had been hemmed in by his desire for international legitimacy, even though amending the Russian constitution to remove term limits would have been "easy and understandable in the context of Russia's stage of political development." xxxxx speculated that the de facto rejiggering of power between the Kremlin and White House was awkward, but necessary, given Putin's self-imposed requirement of respecting the Russian constitution. While xxxxx argued that the concentration of power was a "temporary phase" in a "long, very long" evolution to more democratic institutions, liberal critics like former Duma deputy xxxxx see the accumulation of power -- with Putin in "de facto and de jure control over the club of the top administrative and economic nomenclature" -- as an end in itself. As xxxxx noted, the flurry of presidential orders shifting Kremlin staff to White House positions in advance of Putin becoming Prime Minister on May 8 were an interesting reflection of Putin's mentality: rather than have "little Dima" sign the presidential decrees authorizing the transfer of cadre, Putin continued to dictate the terms of his premier-ship, revealing how lopsided this partnership will be at the outset.

6. (C) Amidst the political uncertainty, the idea of Russia evolving into a parliamentary republic is batted around, but mostly batted down. While both xxxxxxxxxxxx were at a loss to explain Putin's decision to head United Russia absent a strategy based on constitutionally reconfiguring Russia's political system, each conceded Putin's public opposition to the idea. Given Putin's domination of politics since Medvedev's March 2 electoral win, many viewed his comments at the one-year memorial of former President Yeltsin's death, that the presidency would "continue to serve the Russian people and protect (Russia's) sovereign interests," as significant. xxxxx confirmed to us that during the course of his xxxxx with Medvedev, the President-elect was insistent that Russia required a presidential system and dismissive of public speculation over the "tandem."

7. (C) xxxxx while discounting the role of opposition parties at present, warned against GOR policies that created competition between bureaucrats rather than parties. While Russia was not a democracy, xxxxx maintained that it was on a path that could lead to democracy, but only if more pluralism was built into the system. The problem with the ruling party's self-conscious imitation of Japan's Liberal Democratic Party, with its creation of "clubs," he stressed, was that United Russia lacked intra-party ideological coherence and competition. At the end of the day, it would not matter what xxxxxxxxxxxx thought, but rather how the Kremlin told him to vote that would determine the outcome of any Duma contest. The challenge for Medvedev, xxxxx posited, will be to reintroduce faith in the system among middle class voters, who stayed home or spoiled their ballot, that their voice matters. It is that portion of the electorate, xxxxx stressed, that the government will need to rely upon for support for economic modernization.

Staff and Spousal Ambitions ---------------------------

8. (C) The maneuvering begs the question of what Putin and his entourage could possibly fear in the reflexively loyal Medvedev. Ekspert magazine speculated that the mere formation of an economic think-tank (ref b) by the President-elect had been enough to raise concerns of a rival team and vision. When asked, xxxxx did not dispute the analysis, acknowledging that between the outgoing and incoming presidents' staff there were elements of competition. Even on minor issues, such as extending press invitations for the inauguration, xxxxx said that confusion over lines of authority had led to delay. xxxxxxxxxxxx admitted to us that the transition had produced legislative and political paralysis, with everyone "waiting for directions" on how to work with the tandem.

9. (C) The role of Medvedev's wife, Svetlana, in generating tensions between the camps remains the subject of avid gossip. xxxxx hinting at Svetlana's reputation for aggressive social climbing, xxxxx was less discrete, calling her a "stupid and ambitious" woman, who purportedly had already drawn up a list of officials who should "suffer" for their betrayal of

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Medvedev when First Deputy Prime Minister Sergey Ivanov was ascendant.

Comment -------

10. (C) In the absence of facts, speculation is driving Moscow political currents. While it will be months before we get a better sense of the division of labor between Medvedev and Putin, the sense here is that the pre-inaugural atmospherics have diminished, rather than buttressed Medvedev's political stature and fueled nervousness among Moscow's hyper-sensitive political elite as to whether the succession question has been definitively resolved. Putin has been master of the political surprise over the past year and consistently bamboozled the chattering class and pundits as to his long-term intentions. Russell

XXXXXX: Redacted by the editors. Important note on the dispatches...

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E.o. 12958: decl: 08/22/2018 Tags: pgov, prel, pinr, rs Subject: medvedev loses out in russia-georgia war

Classified By: Ambassador John R. Beyrle: Reasons 1.4 (b, d).

1. (C) Summary. Unlike Putin, whose leadership during the Chechen war strengthened his political power, Medvedev's performance to date has reinforced his status as junior member of the tandem. Two anecdotal reports suggest that Putin was displeased with the President's performance at the start of the conflict; Putin, not Medvedev, set the tone and tenor of Russia's war policy. The conflict exposed Medvedev's weaknesses, his lack of a "team" of advisers, and the paucity of levers that he holds to influence policy, particularly in foreign affairs. While most Russians have yet to calculate the long-term consequences of the Georgian war, a near term conclusion is that the conflict has reinforced Medvedev's need for a "regent" and validated Putin as the man most Russians trust to protect their national interests. End Summary.

Medvedev Stumbles -----------------

2. (C) The war in Georgia capped Medvedev's first 100 days in office, and provided him the chance for a defining moment as the country's military and political chieftain. Yet, two anecdotal reports suggests that Medvedev blinked when the Georgian conflict began. xxxxx told the German Ambassador that Putin was deeply concerned by the failure of Medvedev to take immediate actions and to show resolve on August 8. Putin intervened repeatedly from Beijing, where he was attending the Olympics. Several phone calls took place between the Prime Minister and Medvedev, with Putin using a meeting with Kazakh President Nazarbayev to set the initial Russian public hard-line. Similarly, in either an indiscretion or a deliberate slight,xxxxxxxxxxxx confided to the French Ambassador (on the margins of Sarkozy's August 12 visit to Moscow) that Medvedev had come in for significant criticism among the ruling party elite for his handling of the initial hours of the crisis.

3. (C) At first glance, the interaction between the two during the Georgia war appeared a confirmation of the "regency" model of leadership posited by many Kremlin observers about the tandem, with Putin taking charge when his protege faltered and then stepping back once he had righted the ship of state. Putin, not Medvedev, made the first strong public Russian address on the conflict after his return from China. His bristling speech in Vladikavkaz on August 9 set the tone and message of Moscow's approach: accusations of genocide, promises of aid to mitigate the "humanitarian disaster," and an explanation of Russian action as justified and legitimate. In the days that followed, a pale and tired Medvedev met with various military and government officials before the television cameras, but he never addressed the people directly -- in part because Putin had already done so. xxxxxxxxxxxx characterized Medvedev's performance during the first days of the war as a schoolboy who learned his lessons by rote, but without the vehemence of true conviction. Indeed, at one of the few public meetings between Putin and Medvedev, the Premier resorted to "suggestions" that the military prosecutor should look into evidence of "genocide" in South Ossetia, and Medvedev duly agreed to give the order.

4. (C) As the conflict cooled down and Medvedev took a visible role in hammering out a ceasefire agreement with French President Sarkozy, the public portrayal of the tandem began to shift back to its "proper" balance, even as the French told us it was Putin who joined the meeting to broker the "Medvedev-Sarkozy" agreement. Medvedev moved to the forefront of Russia's government controlled television stage and Putin returned to focus on other matters. According to the newspaper Kommersant, Levada Center polls in August showed a slight increase in popular perceptions of Medvedev's position in the tandem, with 14 percent of respondents agreeing that real power is in the President's hands, up from 9 percent in June, but still far below the near 20 percent figure at the time of Medvedev's inauguration. Tellingly, nearly half of respondents saw Medvedev and Putin sharing power.

100 Days Leaves Medvedev Poorly Prepared ----------------------------------------

5. (C) Few are surprised that Medvedev was unprepared for the Georgian war. Before the conflict, Medvedev had focused on domestic issues that had been his forte as Deputy Premier. He had taken initial steps in his first three months in office to define himself: promoting the domestic themes of anti-corruption, economic modernization, and, in foreign policy, a new European security architecture. He also went as far as indirect criticism of Putin's attack on the Mechel coal company in late July. Pro-Kremlin commentators like lawyer Pavel Astakov and analyst Dmitriy Orlov in recent weeks penned paeans to what they claimed were Medvedev's successes in launching judicial reforms, promoting small business, and tackling the thorny issue of pervasive corruption.

6. (C) While debates have continued over whether Medvedev is a "liberal" or a Putin flunky, there is general consensus that Medvedev remains circumscribed in his ability act independently. xxxxx conceded that Medvedev had ambitions and was being pushed by his inner circle (largely remnants of the Yeltsin team) to be "more liberal," but he had no capacity to carry them through. xxxxx attributed this to Putin's shift of Kremlin cadre to the White House -- a move that left Medvedev largely adrift in his own administration. Editor/owner of the independent xxxxx judged Medvedev politically naive, despite 17 years in the inner circle. xxxxx who with eight other prominent editors attended a long, liquid dinner with the President, described Medvedev as saying the right things, but with no clear ability to translate them into practice.

7. (C) While Medvedev spoke vaguely of new European security structures, some argued that Putin remained the real foreign policy helmsman, who used informal relations and the creation of new White House entities to forge his own policy team. The newly appointed Director of the Russian Institute for Democracy in NY, Andranik Migranyan, judged to us that even before the Georgia crisis, Medvedev had taken a beating in foreign policy, with the appointment of Ambassador Yuri Ushakov to the White House a clear sign of Putin's encroachment on Kremlin turf. Medvedev lacked a foreign policy team, and his hesitancy, or "lack of tonality," on important issues was apparent in the diplomatic mishap at the G8 over Zimbabwe. Migranyan predicted that Putin would continue to dominate the policy milieu through his connection to the intelligence services and deployment of Ushakov.

Looking Ahead -------------

8. (C) For those who see Putin as protecting and developing his successor as "regent" -- including xxxxx and Gleb Pavlovskiy -- the conflict gave some indication of Medvedev's strengths and weakness during times of crisis. Medvedev stills needs Putin, according to Pavlovskiy, as the primary source of the President's legitimacy. If Putin were to leave office today, Medvedev would have a tough fight; in the eyes of half the Russian public, trust of Putin constitutes Medvedev's writ. xxxxxxxxxxxx argued that Putin cannot afford to allow Medvedev to lose his legitimacy as president, in that Putin has staked his reputation on his successor.

9. (C) For others, the war showed that Medvedev is not up to challenge of leadership. Russian Caucasus experts told DCM August 21 that Russia could not show weakness in the face of Georgia's challenge in South Ossetia for fear of both external and internal security consequences. Putin, not Medvedev, understood that and orchestrated the required action to meet the challenge, they argued.

10. (C) While most of our contacts agreed that 100 days is too short to draw conclusions, xxxxxxxxxxxx predicted the war could hasten a shift towards a parliamentary system. xxxxx characterized Putin's public persona as Russia's CEO, rolling up his sleeves on issues that matter more to Russians while Medvedev handles the ceremonial duties of President. He likened the situation to the German model, which Putin well understands, and posited that the Premier may aspire to play Chancellor to Medvedev's German President. xxxxxxxxxxxx likewise sees Putin as laying the foundation for a parliamentary republic, by taking the lead of Russia's most politically powerful party and shifting many formerly presidential functions to the White House.

Comment -------

11. (C) After the Georgian conflict, nobody questions Putin's dominance of the political system. What remains to be seen is whether he intends to transfer the power mantle to Medvedev, as the "regency" school predicts, or to further consolidate his power as Premier. Putin's modus operandi is to create options and to avoid picking one particular path, suggesting that we will see him continue to follow both options as he waits to see how things play out. Among the populace, there is a sense of national pride and patriotism as the vast majority of Russians rally around the Kremlin. The success of Moscow's "short, victorious war" accrues to the tandem team, although we assess more so to Putin than the President. The Russian elite, highly attuned to signals from the Kremlin, are likely to see the Georgian war as evidence that it is too early to dismiss the influence of the silovik wing or its captain, Putin. And in light of the Kremlin wagon-circling we expect to follow the independence recognition decision, Medvedev's agenda of economic modernization, anti-corruption, and European security focus will lose any sense of urgency that it might have had. End comment. Beyrle