Elizabeth Stephens, Head of Credit and Political Risk Analysis for insurance broking group JLT, explores what the fractious political atmosphere holds in store for Russia following the Presidential elections on 4th March.
“This time last year, a human chain of 30,000 protestors would have been an exceptional event in democratic Russia, but last weekend’s display of public discontent in Moscow was just the latest in a series of mass demonstrations against the enduring political monopoly of Vladimir Putin and Dmitry Medvedev.
“Considered alongside December’s parliamentary elections, in which United Russia secured 49.6 per cent of the vote, it is tempting to conclude that the duo’s grasp on power is waning. But despite widespread evidence of vote rigging, and concerns over the forthcoming count, support for Putin and Medvedev remains strong.
“Recent opinion polls indicate Putin will secure up to 66 per cent of the vote – more than the 50 per cent required to avoid a second round run-off with his closest Communist rival.
“Protests are mostly limited to an urban, middle-class minority – which accounts for no more than 20 per cent of the population – posing no immediate threat of a ‘Russian-Spring’. Across most ofRussia’s vast and predominantly rural territory, Putin commands a mixture of genuine respect and admiration – or at least pragmatic support, supplemented by state subsidies.
“Under Putin,Russia’s GDP has risen substantially – fuelled by high oil prices, vast reserves and its control of distribution to gas hungry Europe. Meanwhile, Putin has used populist policies and rhetoric to restoreRussia’s sense of national pride, recalling the fonder memories of the Soviet era, combined with a relatively modest, yet tangible increase in living standards.
“Medvedev, regarded by many as more progressive than Putin, has used the Presidency to spearhead a programme to diversify Russia’s industry, with aspirations to move away from the current reliance on energy towards an economy with more developed technology and service sectors, in order to avoid the threat of an oil triggered boom and bust.
“However, despite the incumbent’s stance againstRussia’s endemic corruption, little has been done to challenge the public perception of the state; including its murky relationship with business and industry, and a police force that invites near unanimous suspicion.
“There is also suggestion that in a political pact that shows no indication of breaking, whatever differences there are between Putin and Medvedev serve only to broaden their voter appeal.
“After passing legislation to increase the terms of office to six years, Putin could be in power until 2024 – stretching his paternal image to the grandfatherly. However, following his predicted re-election on Sunday, visible tensions are unlikely to dissipate.Should Putin set a departure date after entering office, this could stall the opposition’s momentum, but it is likely that Russians will experience greater press censorship and further evidence of the non-existence of the rule of law before the ruling party regains order or is replaced – while it suppresses dissent and resorts to ever more extreme measures to enforce the semblance of a united Russia.”