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### Viewing cable 09MOSCOW3109, SYSTEMIC REFORMS UNLIKELY WITHIN MEDVEDEV'S

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09MOSCOW3109 | 2009-12-24 09:30 | 2010-12-01 21:30 | CONFIDENTIAL | Embassy Moscow
Appears in these articles: http://www.spiegel.de/

`

    VZCZCXRO4998
    RR RUEHDBU
    DE RUEHMO #3109/01 3580930
    ZNY CCCCC ZZH
    R 240930Z DEC 09
    FM AMEMBASSY MOSCOW
    TO RUEHC/SECSTATE WASHDC 5789
    INFO RUCNCIS/CIS COLLECTIVE
    RUEHXD/MOSCOW POLITICAL COLLECTIVE
    RHEHNSC/NSC WASHDC
    RUEAIIA/CIA WASHDC

` `

    C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 003109

    SIPDIS

    E.O. 12958: DECL: 12/24/2018
    TAGS: PGOV PREL PHUM PINR ECON ETRD KDEM RS
    SUBJECT: SYSTEMIC REFORMS UNLIKELY WITHIN MEDVEDEV'S
    MODERNIZATION AGENDA

    REF: MOSCOW 002781

    Classified By: ADCM Susan Elliott for reasons 1.4 (b) and (d).

    ¶1. (C) Summary: President Dmitriy Medvedev's high-profile
    campaign to modernize Russia appears designed to give Russia
    modest, mostly long-term, economic benefits without altering
    the basic economic and political structures that Medvedev
    inherited from Prime Minister Vladimir Putin. To the chagrin
    of some experts close to the President, the proposed changes
    are tactical in nature. If specific measures in Medvedev's
    agenda like enforcement of the rule of law, decreasing
    corruption, increasing transparency, building basic
    infrastructure, and protecting intellectual and property
    rights could be implemented, broad based growth could take
    place. Medvedev's desire to possibly run for re-election may
    be partially responsible for his push to modernize Russia
    and, unlike Putin, hold officials accountable for their
    actions in the aftermath of recent tragedies. Nonetheless,
    Medvedev's modernization drive provides US officials another
    potential hook for cooperation. End Summary.

    ------------------------------------
    Modernization Tactical Or Strategic?
    ------------------------------------

    ¶2. (SBU) Medvedev's ability to change Russia is based upon
    his concept of modernization, which he and Putin have
    publicly defined in different ways. During his annual
    address to the Federal Assembly on November 12, Medvedev
    described modernization as a broad change of mindset and
    business practices, with the focus on developing medical,
    energy, and information technology, space and
    telecommunications systems, and increasing energy efficiency.
    He described Russia as a multi-party democracy (reftel), and
    also said that the country needed "comprehensive
    modernization," which would result in a more democratic,
    market-oriented, competitive country. Medvedev has continued
    publicly to discuss modernization and has met with various
    committees, government bodies, and the media to push his
    agenda.

    ¶3. (SBU) In his speech to the United Russia Congress on
    November 21, Putin emphasized the economic aspects of
    modernization and cited Medvedev's five key areas of focus.
    He specifically pointed out the need for modernization of
    industrial and defense enterprises, ports, and the pension
    system. Putin also noted that Medvedev's call to "overcome
    chronic backwardness" and raise the level of Russia's overall
    development reflected the mood of all of Russian society.
    Putin only mentioned modernization twice during his four hour
    televised call-in event on December 3, despite numerous
    questions about what the Government would do to improve
    Russia's economic situation.

    ¶4. (C) Medvedev's tactical measures for achieving success in
    the five defined areas could be achieved with minimal
    structural changes to the economy. Installing individual gas
    meters to promote less-wasteful use of fuel, changing to more
    energy efficient light bulbs, studying the effect of
    decreasing the number of time zones in Russia, and building
    more supercomputers could provide short to medium-term
    economic benefits. They would not, however, significantly
    change the structure of the economy or the murky political
    context in which businessmen and investors operate. Some
    contacts with whom we spoke have jumped on terms such as
    "comprehensive modernization" to suggest, perhaps
    optimistically, that modernization would include wholesale
    changes to Russia's economic and political systems.

    -----------------------------------
    Some Prospects for Strategic Reform
    -----------------------------------

    ¶5. (C) Contacts have noted to us that modernization would
    lead to some targeted economic improvements, but, with a few
    exceptions, have expressed strong doubts about prospects for
    systemic reforms. xxxxx said on December 22 that the President might make
    some changes on the edges of the political system, but denied
    that Medvedev's reforms would have any major impact on
    Russia's political structure, which he said had been
    painstakingly formed over the last 15 years. Medvedev might
    make some significant reforms in Russia's economic structure,
    but would have to "non-violently enforce" modernization on
    the business elite, who preferred the status quo and who
    wanted to avoid making expensive investments.

    ¶6. (C) xxxxx

    Moscow 00003109 002 of 003

    told us December 7 that while various groups of elites have
    competing views on modernization, it was possible for
    Medvedev, with the Government's support, to overcome
    bureaucratic inertia and push through broad economic and
    political reforms. One key institution for Medvedev was the
    Commission on Modernization and Technological Growth of the
    Russian Economy, de facto led by First Deputy Presidential
    Administration Head Vladislav Surkov. Medvedev, xxxxx
    added, wanted to add influential elites to the commission,
    and meet with it more often in order to give it authority and
    provide an impetus to fulfill his modernization agenda. Some
    siloviki, however, such as Rostechnologia's Sergey Chemezov,
    have reportedly boycotted the commission.

    -------------------------------------
    Modernization's Tactical Significance
    -------------------------------------

    ¶7. (C) Other analysts stated that Medvedev had no chance of
    changing the economic or political systems because he did not
    have the inclination, power, or buy-in of the bureaucracy to
    do so. xxxxx told us December 21 that they see little prospect
    for systemic reforms within the President's modernization
    agenda. xxxxx said that democratic reforms could be
    the spark that helped push through additional large-scale
    reforms, but he "unfortunately" did not anticipate Medvedev
    making any major improvements in the economic or political
    spheres. xxxxx told us that modernization was focused on
    economic policies and that Medvedev could make some quality
    improvements in the economy. xxxxx agreed, however, that
    reforms would have to occur within the current political
    system because it was an "illusion" to think that the
    President could overhaul the political system.

    ¶8. (C) xxxxx told us
    December 17 that Medvedev, who he half-jokingly characterized
    as Putin's Minister of Economics and Assistant on Cadre
    Policies, had no chance of modernizing Russia.
    Modernization, he added, was unlikely to increase Medvedev's
    public standing or his ability to increase his team's power.

    ¶9. (C) Longtime expert on political systems xxxxx said on December
    10 that Medvedev was trying to make some tactical changes,
    but had no levers to implement systemic reforms. Russian
    bureaucracy had watered-down, stalled, or hindered reforms
    for hundreds of years, and would be successful in preventing
    any broad reforms. xxxxx added that while Medvedev's
    reforms sounded nice, the President would never significantly
    alter the political system and create a "true" democratic
    system. According to xxxxx Medvedev has benefited from the
    current political system, and any attempts to change the
    system would introduce a level of uncertainty reminiscent of
    former Soviet leader Mikhail Gorbachev. xxxxx also noted that the bureaucracy feared losing
    their privileges and would fight change through bureaucratic
    measures.

    ¶10. (C) xxxxx Public Chamber member, xxxxx bluntly stated to
    us December 9 that the President was not able to reform the
    political system. Medvedev could not implement his
    modernization agenda, which xxxxx saw as a positive
    program for Russia, because the President lacked the levers
    to make systemic reforms, and because of bureaucratic
    opposition. xxxxx characterized Medvedev as a
    "Manilov," in reference to 19th century author Nikolay
    Gogol's fictional character Manilov, who was known, as they
    described, for devising grand schemes, but failing to ever
    implement them.

    --------------------------------------------- ---------
    Modernization Only One Part of Medvedev's Future Plans
    --------------------------------------------- ---------

    ¶11. (C) With Russia's presidential campaign season
    unofficially starting in about a year, many people with whom
    we spoke saw the present as pivotal for Medvedev's future if
    he wanted to prove that he could become an independent
    political leader. xxxxx said that the President needed to

    Moscow 00003109 003 of 003

    fulfill his promises, such as modernizing the country, to
    show all Russians that he can be relied upon to get things
    done. xxxxx said that the key question was when the tandem
    would divide, and that modernization was only one part of
    Medvedev's case to maintain the reins of power. The
    President had made other steps that differentiate his style
    from Putin's, such as holding senior regional officials
    responsible for their duties in the wake of the club fire in
    Perm that killed 150 people and the death of lawyer Sergey
    Magnitsky while in pre-trial detention, that might elevate
    his case.

    -------
    Comment
    -------

    ¶12. (C) Modernization may not facilitate the structural
    changes to the political and economic spheres that some
    experts had hoped, but it could be another tool for Medvedev
    to demonstrate his leadership and, depending on his
    implementation and governing skills, introduce some
    uncertainty into the public and elite over his standing.
    Medvedev is finally challenging the low expectations and
    assessments of many experts after 19 months in office as
    Putin's junior partner. Medvedev has also refrained from
    challenging Putin's authority, control over day-to-day
    economic matters, or respect with the public and siloviki.
    Few currently doubt that the tandem member who will occupy
    the presidency in 2012 remains Putin's decision, but as the
    presidential campaign season approaches the risks and rewards
    for deviating from the tandem's stable relationship
    substantially increases for significant groups of elites with
    an interest in succession politics.
    Rubin

`