Russia wants to control funds for South Ossetia rebuilding / A year into Medvedev's presidency, Putin still at the helm / Russian election machinery malfunctions due to crisis / No public demand for modernization
Russia wants to control funds for South Ossetia rebuilding
Russia and South Ossetia are quarreling over who will monitor the spending of Russian allocations for the restoration of the newly independent republic. This was the reason for the failure of the interdepartmental commission on South Ossetia's restoration last Friday.
Khasan Pliyev, first deputy prime minister of South Ossetia, said money from the Russian budget should not be transferred to the republic without the commission's approval.
On August 20, the Russian Finance Ministry transferred 1.5 billion rubles ($41.5 million) of the 10 billion rubles Prime Minister Vladimir Putin had promised for emergency reconstruction in South Ossetia to a special account with the Russian treasury department for North Ossetia, a Russian republic bordering on South Ossetia.
Moscow insists that the 1.5 billion rubles were provided in an emergency procedure without proper controls, and that a special mechanism should be created for the allocation of the remaining 8.5 billion rubles.
"We are divided on the issue," Pliyev said.
The sides are fighting for control over the Russian funds allocated for the reconstruction of South Ossetia. Moscow has proposed streamlining the procedure by setting up a special federal department at the Regional Development Ministry.
Mikhail Aleksandrov, head of the Caucasus department at the Institute of the CIS, said: "The South Ossetian arguments seem plausible, at first sight. Russia recognized it as an independent state, so relief should be coordinated by an intergovernmental body. Indeed, we do not establish a department for projects in Belarus at the Regional Development Ministry."
"However, Russian allocations tend to vanish in that region, which explains Moscow's desire to control their distribution," the analyst said.
According to Aleksandrov, the crisis has complicated the situation. Last summer and in early fall, Russia was less infuriated at the squandering of money in South Ossetia, but now the government is short of funds even for Russian regions.
"When working in the Caucasus, you have to be prepared that 10%-15% of allocations end in the coffers of local officials. But our financial resources are limited now, and so the lack of results is categorically unacceptable for the federal center," the analyst said.
A year into Medvedev's presidency, Putin still at the helm
The first year of Dmitry Medvedev's tenure as Russian president has shown that there is no such thing as a balanced political tandem between the president and prime minister.
They have in fact failed to operate as equal partners, each doing his share of pedaling in the tandem. It would be more fitting to liken their double-act to Siamese twins, with two heads and only one set of other body parts, writes Nikolai Petrov, Scholar-in-Residence of the Moscow Carnegie Center, adding that the unfortunate conjoined political pair cannot be separated without killing off one of them.
Any chance that Medvedev's role would gradually grow and that he would take over was lost after August and September 2008, marked by a major change in Russia's foreign policy and the onset of the global financial crisis.
The country's agenda changed drastically then, Petrov writes. Medvedev's key ideas, including judicial reform, a crackdown on corruption, and social and economic modernization, were pushed to the margin, while issues handled by Prime Minister Vladimir Putin came to the foreground.
The two leaders' popularity ratings are curious to watch, the analyst writes. The two curves seem like one, as they are both fluctuating in exact harmony. Moreover, Medvedev's rating exists only in conjunction with Putin's one, reflecting the prime minister's popularity.
One can't imagine a situation where Putin's popularity would go down while Medvedev's would remain high or rise further. This is visual proof that things are not changing. Putin still has all the controls, including financial flows, the economy (primarily the oil and gas industry), and balance of influence of the key political and business elites.
He is the one who does the pedaling, and the one who holds the handlebars. Medvedev is just sitting there smiling and waving to the crowds. He still lacks any real tools to implement his slogans, however wise and popular they might be.
Russian election machinery malfunctions due to crisis
The pro-Kremlin United Russia party has a majority in all regional legislatures, and won nearly all mayoral elections in regional centers and large cities.
Taken together with a low turnout in many territories and regions, this has seemingly demonstrated the success of the Kremlin political spin doctors in discrediting elections. However, the March 1 elections pointed to malfunctions in the election mechanism.
In recent years, the federal authorities have cancelled the elections of governors, one-candidate districts for elections to the State Duma and many local legislatures, and cancelled the "None of the Above" entry in ballot papers, as well as the minimum required turnout. They apparently hinted that elections are a useless undertaking, but some people keep coming to the polling stations anyway, to prove that paternalist voters and encouragement to vote for a certain candidate because he/she is allegedly supported by Putin no longer decide the outcome.
People are now paying more attention to officials' inability to tackle acute problems of their city, town or region, such as providing heating to houses, repairing roads, and talking with the people. Nobody expected them to do that in the past; the people only wanted to be left alone. But now they seem ready to call officials to account for corruption and ineffectiveness.
According to www.vybory.izbirkom.ru, United Russia candidates and mayors supported by the pro-presidential party lost elections in four regions out of nine in Primorye in Russia's Far East and in seven out of 14 in the Khabarovsk Territory.
This can be explained by the intrigues of local businesses hit by a recent increase of duties on foreign automobiles. But the picture is almost the same in European Russia.
United Russia candidates and mayors in the Arkhangelsk Region lost six of the 13 elections and won in six cities, with the results of one election divided almost equally between the United Russia candidate (35%) and his opponent (34%).
Affected by the deepening crisis or stagnation, local officials may start acting according to the survival instinct rather than the policy of the party.
No public demand for modernization
The global economic crisis will soon create prerequisites for the modernization of Russia's economy, Deputy Prime Minister, Finance Minister Alexei Kudrin said at an investment and finance forum in Moscow on Monday.
He said Russia would use a totally different development model, with the required economic factors emerging to support it: low inflation, long-term money and a stable ruble.
However, analysts warn that Russia in fact lacks the most important condition for modernization - quality human resources and public demand for it.
These modernization dreams are naive, analysts say. Yevgeny Gavrilenkov, chief economist at the Troika Dialog brokerage, cites reasons why they say this:
"First of all the populist policies. What will happen in two or three months, when public pressure on the government doubles as influential business and political leaders come to ask for additional financing? And second, the oil price. If it drops as low as $25-$30, the budget deficit will increase significantly."
But the key problem is people. "Those who think that there is an active social group, eager to start up businesses if allowed, are deluding themselves," said Konstantin Simonov, head of Russia's National Energy Security Fund.
He believes people do not want any modernization. They just want to lie low until things get right again - until salaries begin surging, backed by oil exports rather than their own productivity.
"Russia has been living off commodity exports, nourishing predominant consumer society values. There was an impression that we could buy anything, and therefore didn't have to develop production," said Dmitry Badovsky, deputy director of the Research Institute of Social Systems think tank.
Officials aren't motivated to modernize either.
They would be, if their salaries were pegged on gross regional product fluctuations, suggested Sergei Borisov, chairman of the Opora Rossii organization of small and medium-sized businesses.
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