Putin Summons The Nation, Sort Of

The presidential address which Vladimir Putin delivered to the Federal Assembly on May 26 was bound to be anti-climatic. Wednesday’s oration was overshadowed by more dramatic political events this spring, such as Putin’s re-election as president in March and the firing of Prime Minister Mikhail Kasyanov the previous month.

Still, Putin’s speech failed to meet even the low expectations which had built up. It was rather somber and defensive in tone. He brushed aside complaints that the political system was becoming more “authoritarian,” while carping about public organizations in the pocket of foreign foundations. Putin stressed that Russia’s revival depends on her own efforts, and will proceed according to her own rules. (Text at www.kremlin.ru)

He did not elaborate on the two most sensitive issues of the day: the war in Chechnya and the war on the oligarchs. These are both very much in the news thanks to the assassination of President Ahmad Kadyrov on May 9 and the imminent trial of Mikhail Khodorkovsky. (Without mentioning the oligarchs by name, Putin did criticize the influence of “shadowy” money in the political system.)

Another striking absence from the speech was the United Russia party, which won control of the State Duma for Putin last December. Only two political actors featured in Putin’s monologue: the state and the people.

Putin’s speech was an awkward balance between pride in what has been achieved and caution that more remains to be done. It was not clear whether Putin’s main aim was to reassure people, or to prod them into further action. On the warning front, for example, he bluntly pointed out that life expectancy in Russia is “five years lower than in China.” As regards living standards “we have not yet managed to catch up even with where we were in 1989. Only preserving high rates of development will prevent our being cast into the backwoods of the world economy.”

Putin somewhat mechanically repeated the three goals he laid down in last year’s speech: doubling GDP, halving poverty, and reforming the military. The bulk of the speech was devoted to discussion of housing, health and education, while the only specific economic development issue he addressed was the need to invest in the transport infrastructure.

Putin was circumspect in discussing the overhaul of the government bureaucracy, which has been a major area of action for the new government of Mikhail Fradkov. He was equally vague on the stalled military reform, while warning the generals “to ensure civilian oversight of the effectiveness of the reforms under way in the army.”

Putin was more specific on the financial front. He called for the ruble to be made fully convertible as quickly as possible, and for inflation to be brought down to 3% per year from the current level of 12%. Ruble convertibility is not a problem, given the country’s trade surplus and currency reserves, but bringing down inflation will be tricky. The influx of oil dollars is boosting the domestic money supply, while ongoing reforms will necessitate double-digit increases in the price of electricity, gas and other utilities.

Putin sees economic growth as the best way to tackle poverty. He did not come up with any more specific policy ideas, and his stress on the need to cut taxes suggests that there will not be increased spending from the state budget for poverty, health or education.

The speech will disappoint Putin watchers looking for clues as to his goals for his second (and final?) term in office. It was hoped that he would come up with some big new idea to set the agenda for the next four years, and to prepare the country for his successor. Putin does not seem very comfortable with programmatic politics: after all, he refused to offer a policy manifesto when he was “campaigning” for re-election as president. He seems to prefer stealth politics, springing political initiatives (such as the Khodorkovsky arrest, or the firing of Kasyanov) on an unsuspecting public. Either that, or he needs a new speech-writer.