The trend of polarization of the Russian elite suggesting different models of behavior in the crisis situation finally shaped last week. Some part of the elite, they can be conditionally called liberal reformers, stand for fundamental reconstruction of the political system; others, the conservators, are pushing forward the idea of Russia’s autarchy as an extreme measure with the objective to maximally isolate the country from consequences of the global crisis.
In the context of this confrontation the perception of 2020 Strategy and forums devoted to it has changed. Currently not only the letter of the document is important, which will be revised not once in the light of the crisis, but rather its spirit envisaging gradual modernization of the political system without its fundamental destruction like in the 1990s. Since confrontation of the two groups is likely to finish with a compromise, the struggle for control over the discourse of the modernization project is being brought into the foreground. The winner will claim authorship of the Russian political system in the second decade of the 21st century.
However, the current system is enough durable so far, which was demonstrated by the regional elections whose results were drawn last week. United Russia managed to preserve dominant positions, although they weakened in a number of regions in favor of parliamentary minorities. This, however, does not pose any threat to the political system on the whole. Thus, if there is no new serious decline in social and economic parameters, United Russia will manage to retain its domination in the crisis period. The municipal election results were alarming for the party of power as it failed in some cases to ensure simple majority or mayor posts. Moreover, conflicts of local clans surfaced and UR failed to settle or at least conceal them.

Administrative conflicts and public politics stirred up by the crisis were balanced last week. President Dmitry Medvedev further developed the idea of Supreme Arbitration Court chair Anton Ivanov about the necessity to modernize Russian laws. It seems the prosecutor general’s office will have a considerable role in this project – it is carrying out anti-corruption examination of bills and has already pointed out that at least 10,000 of them contain corruption motives. Thus, the prospects of cardinal modernization of Russian laws (however, on the municipal level mainly) are shaping clearer. It should be noted that the president supported the initiatives of Yury Chaika’s administrative rival, investigation committee head Alexander Bastrykin, pointing to the necessity to work with such an important institution as the jury.
Last week the head of state introduced two last bills out of the so-called 10 planks voiced in his 2008 Address. Thus, his plans to partially liberalize the Russian political system are acquiring a more and more complete shape despite the criticism by some opposition members, who believe this is imitation. These processes are taking place amid another wave of rumors about soon breakup of the ruling tandem and dismissal of Vladimir Putin. Such rumors are likely to be due to the anniversary of Dmitry Medvedev’s election, which will gradually turn into the anniversary of his inauguration, which will provide ground for speculations about the tandem’s collapse in the next 2.5 months at least.
On the administrative level there was complete confusion over military reforms. According to the latest data, the airborne troops will be reduced, which contradicts the sense of the reforms aimed at increasing the number of constant combat readiness units. Confidence of the defense ministry’s top officials that the nuclear shield is enough to withstand modern military threats also causes doubts.

Last week Dmitry Medvedev sharply intensified his activities demonstrating his intention to take a more active part in anti-crisis management, including defining priorities of state support. A clear signal was sent to the functionaries regarding the necessity to be more initiative and thus take more responsibility upon themselves. The criticism was mainly aimed at governors (the policy of ‘stick’ was demonstrated early last week when four governors were dismissed) but the government was also addressed, although the president shared approaches with the PM in the sphere of protectionism in economy amid the crisis.
Dmitry Medvedev’s team also became more active noticeably, especially in its natural sphere of influence – the judicial branch of power. In particular, the higher qualification panel of judges ruled to deprive Lyudmila Maikova, head of the arbitration court of the Moscow district, of her status of judge. She and Moscow Arbitration Court chair Oleg Sviridenko are related to the clientele of the so-called siloviki. Now Supreme Arbitration Court head Anton Ivanov has a chance to build the arbitration vertical, which he has been trying to do for some years. His plans are likely to be even broader as he declared about the necessity to clear up Russia’s laws. If he succeeds, this may lead to bigger attractiveness of court trials compared to informal arbitration by law enforcement bodies, which will decrease their weight. At the same time, one should not overestimate the role of the president’s top hundred reservists, who were announced last week, in the process of strengthening of positions of Dmitry Medvedev’s team. The analysis of its composition shows it consists of representatives of different elite groups.
The staff struggle in the Cabinet remained sharp in general; it received an additional impulse after agriculture minister Alexey Gordeyev and his ‘right hand’ deputy minister Alexander Kozlov left their posts. On the whole, there are two Gordeyev’s deputies who are claiming the vacant post: one of them (Andrey Slepnev) is related to Arkady Dvorkovich’s group while the other (Nikolay Arkhipov) is likely to be a protégé of the so-called siloviki.

Representatives of power agencies were again increasingly active last week. In particular, Investigation Committee head Alexander Bastrykin again put forward accusations against the inner circle of finance minister Alexey Kudrin. This is probably due to the beginning of another offensive at the administrative heavyweight by influential staff and political groups willing to gain control over this strategic post. The heads of General Prosecutor’s Office, interior ministry and FSB were also noticeably active on the media field. Such intensified activities are first of all attributed to the on-going crisis and decline in resources, which resulted in sharpened struggle for remaining resources. Moreover, amid the crisis the role of power agencies as an element of the state system will be growing.
The situation around another power body, the defense ministry, which is traditionally considered separate from others, was very confusing last week. After a close meeting of defense minister Anatoly Serdyukov in the State Duma it became known that the military budget would be reduced by 15%, although it is not clear what budget expenses will be revised. The army’s rearmament is likely to be sacrificed, which is unacceptable considering constant deterioration of its combat potential, especially from the technical point of view. The defense ministry and state authorities seem to realize this fact and they are planning to stake on strategic nuclear forces; yet, the situation here is also not so unambiguous. Firstly, the strategic nuclear forces are also degrading inexorably. Secondly, modern conflicts imply the use of the ground forces (such a situation may emerge on the Russian-Chinese border), but they are expected to be reduced within the framework of reforms.

The head of state’s strategic course aimed at broadening the base of his support among the population and the elite became more vivid last week. Coincidences that seemed accidental are starting to acquire a clear and consistent character. In particular, Dmitry Medvedev did not attend the congress of the Russian Association of Lawyers, despite his image of patron of the judicial corporation; however, this did not hinder election of his protégé, Pavel Krasheninnikov, co-chairperson of the association. At the same time the president made an attractive proposal to the interior ministry at a meeting of the MVD board. He declared about the necessity of the ministry’s control over the spending of state resources allocated to fight the crisis. It is interesting that a week earlier similar things were told to FSB. In his video blog the head of state declared initiatives aimed at supporting students – one of the most dynamic and mobile social groups.
There was noticeable expansion of first deputy PM Igor Shuvalov last week, who continued publicly asserting himself as the main anti-crisis manager. In particular, he declared that the list of enterprises to be rendered state assistance would be considerably enlarged and the resources would be allocated to them directly, not through VEB. This means tactical defeat of deputy PM Igor Sechin who has in fact supervised distribution of money through this bank since last autumn. Yet, government liberals headed by Shuvalov may lose on the strategic side: despite temporary slackening of crisis developments, fundamental factors point to its upcoming second round, after which members of the liberal camp in the government may become scapegoats.

Despite further deterioration of crisis tendencies the main last week event was the election of a new patriarch. In line with the most probable expectations, Kirill received 72% of the vote cast at the Local Council and became a new patriarch having left behind his main opponent Metropolitan Kliment. It should be noted that his rivals held themselves heads up until the last moment trying to use every chance. However, Kirill’s victory is just his first step as patriarch since he is facing tasks not less serious than late Alexy II in 1990. Firstly, this is defending unity and modernization of the church so that it could unobtrusively but steadily play a more important role in life of the country. Secondly, this is establishing channels of cultural cooperation with other Christian churches.
Administrative struggle continued in more traditional ways last week. In particular, supreme arbitration court chairperson Anton Ivanov received considerable preferences from a technical (ex facte) decision of Dmitry Medvedev. This concerns replacement of Veniamin Yakovlev with Sergey Dubik as the president’s representative at the Higher Qualification Panel of Judges. However, this decision may result in retirement of head of the federal arbitration district court of the Moscow District, Lyudmila Maikova, who works in tandem with Ivanov’s administrative opponent, Moscow arbitration court head Nikolay Sviridenko (Veniamin Yakovlev was her mentor and patron). If she retires, Anton Ivanov will have a chance to implement his long planned project of creating a single vertical of arbitration courts under his patronage, after which he will be able to launch horizontal expansion.
Staff conflicts also continued in the government. In particular, relations between the federal anti-monopoly service and the federal service for customer protection sharpened. This time the pharmaceutical, not alcohol, market was the apple of discord, although the sides used the same methods: public accusations. However, the customer protection service took into account previous lessons and this time was the first to start offensive – it published quite a sharp press release. Struggle between the natural resources ministry and the federal service for ecological, technological and atomic inspection formally subordinate to the ministry also intensified; the ministry is suppressing last centers of staff separatism that have existed there since the service was directly subordinate to the government.

The logic of developments during the crisis prompted authorities last week to deal with the problem of countering social and political consequences of the crisis more comprehensively. Until recently almost no systemic measures were taken in this direction and the stake was made mainly on use of force; currently the situation has changed. For the sake of counterpropaganda United Russia organized a number of rallies in support of the domestic automobile manufacturing industry and raising customs taxes on imported cars. This should draw accusations of lobbying interests of large businessmen aside from authorities and show that state authorities care about common workers. It is too early to draw the results, but judging by the first signs, United Russia’s role in covering these events is overemphasized.
The relations inside and between law enforcement and defense agencies are still tense, which is attributed to growth in their influence in the current situation. The prosecutor general’s office and its allies are still trying to restore at least part of positions lost as a result of establishment of the Investigation Committee (IC). In particular, the Supreme Court submitted a bill envisaging the return of the right to initiate criminal cases against special individuals to the prosecutor general’s office. However, it faced tough opposition by the IC allies and it is unlikely to be passed. Defense minister Anatoly Serdyukov managed to break his opponents’ resistance and lobby transfer of the right to sell property available as a result of military reforms to his ministry. Intensification of the process of selling the defense ministry’s property frozen last May should now be expected.

Despite the growing role of mass politics amid the crisis, staff struggle has remained quite active and intensive. It is additionally influenced by the necessity to fight the crisis; this is it should be taken it into account when analyzing staff reshuffle and structural changes. In particular, a decree signed by Vladimir Putin shortly before the New Year stipulates simplification of procedure of agreeing documents worked out by the government as well as actual introduction of the principle of personal responsibility for failing to live up to terms of their development. However, this measure may substantially increase conflict potential on the level of deputy PMs.
Another vector of staff changes aimed at fighting the consequences of the crisis affects law enforcement agencies. Firstly, the president initiated amendments to the civil procedure code broadening authority of the Prosecutor General’s Office in social and economic disputes. On one side, this may minimize losses of citizens in disputes with employers; on the other side, this may partially offset losses of the Prosecutor General’s Office following reforms in the entity. Another direction of modernization of the law enforcement system is fine-tuning of power bodies. In particular, overtures made by authorities (firstly, by Dmitry Medvedev) to interior ministry officers are becoming more visible. It is quite possible that instead of the defense ministry, which was in the focus of attention following the five-day war, the head of state will shift his sympathy towards the police body.

Due to obvious reasons last week’s leitmotiv was drawing up the 2008 results and making forecasts for 2009. In particular, President Dmitry Medvedev drew up the 2008 results simultaneously testing a new format for the head of state – a problem interview with leading domestic TV channels. Issues regarding purely domestic politics occupied a minor part in his speech compared to his Address due to understandable reasons: the crisis of international institutions and the financial and economic crisis have been the major events this year. Nevertheless Dmitry Medvedev paid noticeable attention to army reforms, having indirectly confirmed that state authorities are concerned with growth in protest sentiments among officers. The issue of relations inside the tandem was traditionally raised: the head of state again confirmed that the president and the PM had worked well together.
The consequences of the crisis are still the mainstream that more and more negatively influence the situation. Authorities are trying to operatively react to current challenges and control the vector of protest sentiments, rather than the sentiments themselves. More attention has been paid lately to the so-called white collars who were unattended in the rich 2000s in contrast to pensioners, blue collars and cheated individuals who invested their funds in house construction. At the same time, the protest potential of this social group is noticeably exaggerated. This group is concentrated mainly in large cities where there are opportunities to find alternative jobs, although less prestigious and less paid. While the economy is landing softly, white collars will prefer individual strategies of adapting themselves to the situation.
Amid the deterioration of the crisis it is becoming clear that previous inside-elite configurations, especially among major businessmen, are changing seriously and will be changing. Among the winners have been those representatives of the elite who have access to state resources and control them, which is even more important, and thus dictate their conditions to the defeated.
Amid intensification of mass politics the state’s desire to use not only the carrot like in the rich 2000s but also the stick is becoming more noticeable. Actions of the Moscow region’s Zubr special police unit in Vladivostok is a vivid example of this. Simultaneously there is a tendency of a growing role of repressive means in modern Russian politics, which is attributed to rising instability and the necessity to ensure stability of the political system.

On the background of the worsening financial and economic situation, struggle for resources between elite groups and companies in their spheres of influence sharpened. On the eve of the new year, whose coming is traditionally accompanied by growth in tariffs of natural monopolies, struggle around these rates intensified and the ongoing crisis contributes to this fight. In particular, Russian Railways managed to find common ground with the government and it may count on preferences by the state. The electrical energy sector also got its share due to patronage of deputy PM Igor Sechin. But Gazprom sustained a tactical defeat: its tariffs will be raised quarterly and this growth may not be the same the monopolist’s managers are expecting.
Another urgent issue on the government level is working out an optimal strategy of struggling against the crisis. This was reflected in the creation of an anti-crisis commission headed by first deputy PM Igor Shuvalov. Its composition was announced last week and it shows that representatives of different branches of power and ideological movements were included into it to maintain balance. This will ensure additional breadth of scope when working out solutions and will serve as a guarantee that no influential player will impede their implementation. However, not all government heavyweights are in this new body. In particular, deputy PM Igor Sechin is not its member.