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Putin's third term: what was promised and what has been done
Material posted: Publication date: 09-12-2017
"Vedomosti" has analyzed what has changed in the economy, foreign and internal policy of the country in 2012.

Economy: stagnation instead of growth strategy

Russia needs a new economy, wrote Vladimir Putin in his pre-election article for the "Gazette" in January 2012: technology rapidly changing, global competition intensified, as never before, the need to overcome the country's dependence on exports of raw materials. The main budget reference point proclaimed education and science, the main social task is the development of the "creative class". "Creative" workers will not work in legacy industries – they need high performance workplaces, improved institutions and business climate, fair competition. It was planned that by 2020 the share of mining industries in GDP will increase by 1.5 times, half of the jobs will be in small business. The backbone of the "creative class" – teachers, doctors, scientists, cultural workers have to earn with dignity, pointed out to Putin in an article for "Komsomolskaya Pravda". Support the future President was supposed to be "middle class". For him, it was planned to improve the quality of social services, to give an opportunity to save for a dignified old age through pension programs, to make available a mortgage.

In many respects Putin is reproduced ideas of Strategy 2020 – shaped for his next term ambitious program of reforms. She had to ensure economic development in all areas: to increase the productivity, incomes, investment, improving the business climate and reduce the state presence in the economy, stimulate innovation and reform of universities, to change the pension system to reduce poverty, increase life expectancy and improve the quality of social services.

After returning to the Kremlin after a four-year forced absence, Putin "digitized" some of these goals may decrees. Instructed, for example, by 2018, to increase investment to 27% of GDP, and labour productivity by 1.5 times, to raise Russia's ranking in the world Bank's doing business from 120th to 20th place, bring five Russian universities in the first hundred leading world universities. Real wages, according to the decrees, to 2018 should grow by 1.4–1.5 times the salaries of teachers, doctors and scientists to make 100-200% of the average for the relevant region.

 

We have to act quickly, immediately after the formation of the government, said in April 2012, a senior official, otherwise all bogged down in a rut for years, and then a barrier will be the next election cycle. This scenario was implemented: the reform program turned into plans to prepare a new program of reforms. Typically, the "window of opportunity" for reform opened immediately after the elections, says the head of the Economic expert group Evsei Gurvich: elected leader gets a mandate even on unpopular reforms. But in the beginning of the last presidential term incentives for reform has been weakened by high oil prices, followed by the events in Ukraine and sanctions, priorities have changed, he points out, it was necessary to restore macroeconomic stability, and on the fore geopolitics.

From the Strategy-2020 was able to realize a few things, such as the basic macroeconomic and some budget ideas, says Gurvich: in particular, in a modified form works as a fiscal rule. Fundamental pension reform never took place, he States. Moreover, the government took a step back, freezing pension contributions to the targeted social support from the state has not moved. Public sector wages increased, but in part, says another co-author of the 2020 Strategy, the Director of the development Center of the Higher school of Economics Natalia Akindinova. By the end of 2016, the salary is most marked in the may decrees of the categories of public sector employees was comparable to the regional average and even exceeded it, as mentioned in the monitoring of the HSE, but to make the salary took into account the qualifications and professional achievements, motivating them to improve the quality of work, failed. In addition, the implementation of the decrees forced the regions to cut budget investments and take loans, which dramatically worsened the situation with their finances: on October 1, the total debt of the Federation amounted to 2.1 trillion rubles.

What policy makers said about the nomination of Putin

Not resulting reforms, Putin's third term was marked by a stagnation which has developed into crisis. The economy began to lose the momentum of growth already in 2012, when oil cost more than $100. Above this price level was kept and most of the third quarter of 2014, when economic growth was already below 1%. Followed by the failure of their longest in 20 years, a recession triggered by the sanctions, the collapse in oil prices and the ruble in January 2016, the dollar broke the level of 80 rubles., and the Urals crude fell to $27/bbl. But the crisis 2012-2015 was not in the least provoked and the increasing influence of the institutions of Central public administration, the restoration of the administrative power vertical, wrote HSE academic supervisor Evgeny Yasin, in his article "economic Issues". The state share in the economy, according to estimates, the FAS has reached 70%.

The economy started to recover only in 2017, but the potential recovery have been exhausted, as recently stated by the Chairman of the Central Bank Elvira Nabiullina. While all that can wait – "sluggish" growth. Even the traditionally optimistic economic development in the baseline scenario, does not expect that it will reach 2.5%. The expectations of the world Bank is even more pessimistic: 1.7% in 2018, With the global economy, he forecast, will grow by 2.9%.

 

In the end, the macroeconomic stability was the main economic achievement of Putin's third term: inflation was updated in 2017 historic lows slowed down to 2.5%, the exchange rate was relatively stable, the budget is relatively balanced. However, the elections in 2018 Russia is coming with the Luggage of other outstanding issues. And with the need to address new reserves has drastically diminished, and ahead of demographic challenge: the labor market goes reduced generation of the 1990s, businesses can face personnel hunger, and employees – with the need to include the expense of taxes are much more retirees than ever before.

In recent years, the situation for reform formed the ideal, but the reforms there, said a year ago, "Vedomosti" the President of Sberbank German Gref. How and attitude in business. Enterprises to increase investment not ready: according to the accounting chamber, in the financial instruments they hold 16 times more money than investing in production. The world Bank considers Russia one of the leaders in the development of conditions for competition, but the mood to work have no business, complained in October, first Deputy Prime Minister Igor Shuvalov.

Best policy option – the refusal of the inertial scenario and transition to a gradual democratic development, gradual political and economic reforms, wrote to Yasin. All the tactics possible to improve the investment climate, or made or will be made very soon, says one of the officials, however, further changing the system is impossible without change of its very essence: no changes in the political situation, without competition, without addressing the inequities and injustices in the distribution of resources. "We stared at the ceiling," – he concluded.

Foreign policy: Sanctions, instead of openness

"We cannot and do not want to be isolated. We expect our openness will bring the citizens of Russia, the growth of wealth and culture," Putin wrote in an article for "Moscow news" in February 2012 By the end of 2017, Russia was entangled by international sanctions, and its athletes were denied the right to compete at the Olympics the 2018 under the flag of their country.

The Central event of Russian foreign policy after 2012 was the annexation of Crimea. But the question of how to evaluate it fully depends on the political and ideological position of the person who does it. According to Putin's supporters, the "Crimean spring" has led to a sharp increase in geopolitical weight of Russia, confirmed the fact that her final "getting up off its knees" and laid the Foundation to restore the former influence of Moscow in the former Soviet space. Critics of the Kremlin argue that its actions, Russia has completely alienated the once brotherly Ukraine, scared all their neighbors (even a relatively loyal) and made considerable and even yet has not been fully evaluated damage to the system of international law.

In a sense, a consequence of the Crimean events can be considered and initiated in the fall of 2015 the Russian military operation in Syria, which many experts considered the attempt to make Russia a major international player and at the same time to improve relations with the West in the struggle against the common enemy. This goal, however, was not achieved, says the expert of the Center for analysis of strategies and technologies, Konstantin Makiyenko, although "on the way to India discovered America": Russia's military intervention dramatically increased her status in the eyes of such influential in the region, countries like Turkey, Saudi Arabia and Qatar, which has a positive impact on relationships with them. In addition, successfully resolved a local, but no less important for Moscow objectives – preservation of a friendly regime in Syria and the extermination of a considerable part of personnel of the Russian-speaking Islamists.

Along with the return of Russia to the middle East one of the main foreign policy successes, Putin became an agreement with OPEC to reduce oil production, adds the political scientist Yevgeny Minchenko. Although this transaction had serious domestic consequences: it gave me the opportunity to balance the budget in a very difficult economic situation, the expert reminds.

 

But to improve relations with the United States through a joint war with the Islamists failed. These relations during Putin's third term went wrong almost from the beginning, and declared by Dmitry Medvedev, the reboot was seen as a joke. In December 2012 the U.S. Congress in a package with the abolition of the amendment of Jackson – Vanik adopted the Magnitsky act, which imposed yet more limited sanctions against the senior Russian security officials. But after the events in Ukraine in 2014 and the annexation of Crimea the collapse of the Russian-American and Russian-European relations and the gradual buildup of anti-Russian sanctions.

High hopes that Moscow pinned on the new US President Donald trump, too, did not materialize. Its stated policy of improving relations with Russia faced stiff opposition from congressmen and law enforcers, and in this fight trumps the new head of the White house was not. Finally Moscow was disappointed at the trump in August 2017, when he was forced to sign the law of the CAATS, which not only extended the anti-Russian sanctions, but also severely limited the powers of the President.

As such, fundamental for Russian-American relations areas as arms control, the degradation was from the mid-2000s, recalls Peter Topychkanov of Carnegie Centre. A positive factor, he said, is that signed in 2010 the agreement on the reduction of strategic offensive arms (start-3) continues to run, but with a 1987 Treaty on intermediate-range and shorter-range things are bad, but their elimination can result in the collapse of the entire system of arms control.

Domestic policy: total control instead of political competition

To simplify the procedure for registration of parties, to balance the powers between the regions and municipalities, to promote competition among governors, mayors and "functionaries" and fill the "real content" procedure of parliamentary investigations – such a promise Putin made in an article published in February 2012 in "Kommersant". "Political competition is the nerve of democracy, its driving force," stated the author of the publication.

In fact, the beginning of Putin's third term was devoted to the aftermath of the mass protests of 2011-2012 This struggle unfolded on two fronts – law enforcement and legislative. On the one hand, was given a major Bolotnaya case, in which the participants of the March and rally on may 6, 2012 caught and tried until 2016 has been launched "mad printer": the state Duma has started mass production of repressive laws, by which, in particular, tightened the rules of holding rallies, appeared on NGOs – foreign agents, Americans banned from adopting Russian children.

In parallel, it seems to be implemented the reforms developed under President Medvedev, but their original meaning has changed markedly. For example, the interest to return direct gubernatorial elections in recent years have fallen because of the decline in the status of governors, said political analyst Alexander Pozhalov. And most of the many new parties that have emerged in the result of party reform, "was unable to convince the conservative majority of voters in their legal capacity" in the Duma again passed the same four parties, the expert adds.

 

After the annexation of Crimea and the rise of Putin's ratings sky-high level of need in a bitter war with the opposition virtually disappeared. More important topics were "nationalization of the elites", the fight against outside interference (and not only in politics but also in the humanitarian sphere) and upgrading management personnel from Ministers and envoys to the governors and deputies. Particularly active in dealing with personnel issues, the Kremlin has developed in the fall of 2016 as a result of two waves of resignations in less than a year has replaced 23 of the Governor.

The result of the personnel revolution was another centralization of power, said political analyst Nikolai Petrov: "If in the first term Putin has taken away the power of the regions and governors, and now as a result of all personnel changes have been the strengthening of the political centre at the expense of the corporations that were more firmly embedded in the vertical. In addition, there was the dismantling of the system of local self-government." But to manage such a huge state with this level of centralization is impossible, the expert believes: "It involves a weakening of informal institutions and the rejection of the old rules of the game. Previously governors had to provide the result of the election, to dampen inter-elite conflicts and to fulfill the may decrees. Now these rules do not work, and the new announced. The elite are on the hook, the system is paralyzed, because when the Governor does not know what he should do, he will do nothing".

In General, in political life, says Petrov, see the effect of king Midas, when "everything it touches, the Kremlin, becomes non-functional". So it was with the political parties, elections, NGOs, lists the expert: "the Kremlin can't stop in the perfect position to balance the control, and a life. His control is so pervasive that life away from where comes the Kremlin."

Tatiana Lome, Alexei Nikolsky, Elena Mukhametshina

In the preparation of this article participated Margarita Papchenkov, Svetlana Bocharova, Dmitry Kamyshev

Source: https://www.vedomosti.ru/politics/articles/2017/12/08/744578-tretii-srok-putina#/galleries/140737493678986/normal/1


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