VZCZCXYZ0000
OO RUEHWEB

DE RUEHMO #0818/01 0851435
ZNY CCCCC ZZH
O 251435Z MAR 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7289
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

C O N F I D E N T I A L MOSCOW 000818

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/25/2018
TAGS: PGOV PINR SOCI KDEM RS
SUBJECT: CONSTITUENCY FOR CHANGE? OBSERVERS HOPEFUL AS
INAUGURATION APPROACHES 

Classified By: Ambassador William J. Burns. Reasons: 1.4 (b,d).

¶1. (C) Summary: As candidate Medvedev transitions into
"President-elect" Medvedev, commentators have begun to speak
with increasing frequency about political support for a
reform agenda, not only the expected backing from the
"liberal" economic elite, but also more broadly amongst
Russia's business leaders; federal and regional leaders; and
even among certain strata of society. While none would
describe this support as a mandate for change, Medvedev
appeared to be reaching out to this latent base in his
February 15 Krasnoyarsk speech and during his "seminar" on
the economy last week with business and financial experts.
Admittedly, Russia's political experts acknowledge that
Medvedev's core values are not known, and even less is
understood about how the Medvedev - Putin "tandemocracy" will
function, some believe that the prospects for a new "thaw"
are greater than they have been for years -- if Medvedev
chooses to take the reform path. Other observers, while
agreeing that change is necessary, believe that a Medvedev
who has spent 17 years in the shadow of Putin, is not the
person to get that ball rolling. End summary.

A Return to Reform?
-------------------

¶2. (SBU) In recent weeks, we have noted some signs that a
Medvedev presidency could return to the economic reform
agenda that Putin supported during his first years in office.
Economic analysts xxxxx point to the decision not to include
telecommunications on the list of "strategic sectors" as a
first sign of a potential shift away from the policies of
state capitalism. Further, Medvedev has publicly advocated
new policies to streamline the administrative requirements
for the fishing industry, potentially a step toward further
reducing the obstacles to other small businesses across the
country. xxxxx told us that they saw little chance that
Medvedev would tackle administrative reform "off the bat" --
suggesting a more assertive approach to promoting the
innovation economy than Moscow's economic watchers had
expected.

¶3. (SBU) Encouraging signs on economic reform, however, do
not necessarily translate into optimism for reform in the
political sphere. Medvedev has long been with Putin and has
given no indication that he is ready to wade into the
difficult waters of political reform. xxxxx identified the challenge of
gaining control over the "coercive" elements of the
government - the FSB, the Investigative Commission under the
Prosecutor, and other organs controlled by Sechin's allies --
stands as problem number one for the new president,
particularly given their influence over the state
corporations and likely opposition to their reform. Actions
to assert his authority over those powerful players may
require Medvedev to look for broader support beyond the elite
in support of his reform agenda.

Constituencies for Change
-------------------------

¶4. (C) Taking a cue from observers who have focused their
hopes for change on differences between Medvedev and Putin,
the BBC Moscow's Konstantin Eggert argued to us that Putin
had successfully fashioned himself into the "people's
president" -- one who enjoyed the support of the man on the
street and was able to convert that image into unassailable
popularity. Medvedev, Eggert thought, was not that sort of
man. His personality, background, and temperament suggest
that he would appeal primarily to Russia's intellectual and
technical elite, and to middle class businessmen. There is
some evidence that this stratum is ready for change and could
provide a constituency for reform, if Medvedev were to pursue
a new strategy. The educated middle classes, according to
Eggert, are irritated by the gap between what they have
accomplished in their lives and the fact that lack of
institutions means they remain at the mercy of bureaucrats,
whether they be the traffic police, ministry officials intent
on shaking them down, or members of the judiciary should
their troubles cause them to end up in court. Eggert thought
that this quietly restive part of the population could be a
potent source of support, but is unlikely on its own to
"stick its neck out" without leadership from the top.

¶5. (SBU) A recent Levada Center poll offers some evidence
that the looming succession and prospects for change
entertained in Krasnoyarsk have heightened expectations among
a significant minority. Twenty-three percent of those polled

expect that Medvedev will undertake liberal economic reforms,
while sixteen percent believe Medvedev will rely on the
middle class for support (only ten percent expected the same
from Putin when he became President). A reduced number
--from 52 percent for Putin to 38 percent-- believed that
Medvedev would rely on the "siloviki" as he proceeded with
his Presidency. A VTsIOM poll, taken in early March, shows
that 54 percent of respondents expected Medvedev to take
Russia on a more "democratic course."

Dissatisfaction within the Elite
--------------------------------

¶6. (C) xxxxx told us that, in addition to Medvedev's
potential constituency in the electorate, there is support
for resuming the gradual economic reforms that Putin had
begun in his first term, but then abandoned in his second.
According to xxxxx, Deputy Prime Minister Kudrin, Sberbank's
German Gref, multi-billionaire Roman Abramovich, and others
had lobbied for Medvedev as successor in the year preceding
Putin's decision. They, and others like Minister of Regional
Development Dmitriy Kozak (although no friend of Medvedev's)
formed a small, but respected and potentially potent core
group for reform within the Administration. xxxxx thought
that Medvedev might bring additional figures with similar
sympathies into his administration.

¶7. (C) Conversations since the election suggest that support
for a change of course extends beyond the Kremlin walls.
"xxxxx have
separately suggested to us that quiet discontent is the norm
among many -- even those in the United Russia party -- in the
Duma, but that few are willing to lift their heads above the
pack unless they have reason to believe that prospects for
change are real. xxxxx hoped that the economic problems
would ultimately force Medvedev to change course in order to
salvage his presidency.

Will Medvedev Meet the Challenge?
---------------------------------

¶8. (C) As xxxxx told
us: "Medvedev is the best of all possibilities." xxxxx who
had met with Medvedev twice over the years, described him as
"ready to hear sharp criticism," and "ambitious." xxxxx shared xxxxx
measured optimism about Medvedev who, "wants power," and
would use the corruption campaign he had promised to launch
to make inroads on the "siloviki."

¶9. (C) xxxxx agreed that concrete steps would be necessary
in order to overcome the pervasive "cynicism" and "apathy" of
those hoping for more. Gauging the number of such people has
been complicated by the lack of an organization or party for
them to affiliate with. The personalities at the head of the
standard, western-leaning Yabloko and Union of Right Forces
parties have worn thin and street opposition of the sort
promoted by Other Russia has no appeal for the middle class.


¶10. (C) Separately, xxxxx told us xxxxx "on projects I cannot talk
about," he was convinced Medvedev was looking for ways to
signal change. The President-elect was adamant on the need
for internet freedom and the inability of the government to
control satellite airwaves. Moreover, xxxxx argued that
Medvedev was sensitive to the repercussions of the
administration's heartless approach to former Yukos VP
Aleksanyan's medical condition, although Medvedev was
unlikely to expend political capital at the outset to tackle
this case. xxxxx emphasized that the average Russian
citizen was "as far as the stars" from Western liberal values
-- seeing even the limited liberalism that Medvedev
represents as beyond the pale of what a "free and fair"
election would generate. For a frustrated journalist like
himself, xxxxx posited that Medvedev offered a reasonable
route to reform that the "radicals" such as Kasparov and
Limonov did not.

The Tandem Factor
-----------------

¶11. (C) Whatever Medvedev's intentions about pursuing a
reform agenda may be, much will depend on how the
Medvedev-Putin "tandemocracy" will function; something most
observers suspect even Putin and Medvedev do not understand
completely. Some suggest, and Medvedev seemed to agree in
his "Itogi" interview, that all power resides in the

presidency and, sooner or later, Medvedev will eclipse Putin
as first among equals. They see in Putin's stress on
continuity, efforts to elaborate a strategy to 2020, and
comments that there is no daylight between him and Medvedev
on foreign policy, a tacit acknowledgment that Putin's
ability to chart the course has been curtailed with Medvedev
in the President's seat. It follows for them that a
diminished Putin will therefore remain Prime Minister only
long enough to ensure a smooth transition before bowing out.

¶12. (C) Others are less certain. xxxxx believes that Putin did his best to
handicap Medvedev in preparing him for the presidency.
Unlike Putin, the President-elect has no network in the
Kremlin or the regions, unlike Putin who, xxxxx said, on
becoming President, could count on the loyalty of the
security services throughout the country. xxxxx thought the
"siloviki's" continued loyalty to Putin would cause them to
undercut any of Medvedev's efforts at reform or
liberalization. In any event, xxxxx said, "Medvedev has
worked for 17 years in Putin's authoritarian shadow" without
revealing any liberal impulses. Why would they appear now?"

Comment
-------

¶13. (C) Under Putin, Russians have seen an improvement in
their lives and the stabilization of the political sphere.
Medvedev comes from a different generation and outlook than
his predecessor and he seems to "get it" that Russia needs
reform in order to develop. And there is a potentially
influential stratum of support that is quietly hoping for
change and waiting for leadership. The question remains as
to how far Medvedev is willing to go, particularly under
Putin's watchful eye.
Burns