Since Putin first came to power Russian politics has been all about control and stability So when the boat is rocked – as it most certainly has been in the run-up to today’s end of the eighteen-year incumbency of Yuri Luzhkov as Mayor of Moscow – it is time to sit up and take notice. Three aspects of this development deserve particular attention:
Medvedev’s decree firing Luzhkov states the grounds for this decision as being that the mayor had “lost the confidence of the president”. This formula has only been used until now for removing a small number of governors in minor outlying regions whose rent-seeking appeared to have escalated into something closer to organized crime. In Luzhkov’s case, this therefore implies not only political disgrace but also potential prosecution.
It was clearly not meant to end like this. Medvedev has been methodically removing powerful regional governors entrenched since the 1990s. They have all gone quietly, received medals, and with no questions asked about past corruption. In other words, Medvedev was faithfully continuing the Putin system. This worked even for President Murtaza Rakhimov of Bashkortostan, who put up some initial resistance (duly countered by some hostile coverage of him in the national media) only to resign in the “normal” way last July. The same route was open to Luzhkov, but rejected by him. Instead, he made disobliging public remarks about Medvedev and indicated that he had Putin’s support. Finally, on 27 September, he rebuffed the Kremlin’s ultimatum to resign of his own accord.
Had Medvedev failed to respond to this challenge, his presidency would have been undermined. As it has turned out, he has acted for the first time in a way which will confirm him in the eyes of the entire Russian public as a fully-fledged leader. While many will reasonably assume that Medvedev would not have made such striking use of his constitutional powers against the will of Putin, leaving the analysis at that would miss some important points.
First, whatever the future holds for the Medvedev-Putin tandem, the two principals will certainly not permit a third party to interfere. As many commentators have pointed out, Luzhkov’s crude attempt to drive a wedge between Putin and Medvedev was always going to be regarded as unacceptable in principle. But there is another, more interesting angle. The reason for the timing of the end of Luzhkov’s long career is that his term of office was not due to end until July 2011 – uncomfortably close to the national elections (and all the more so if, as now seems likely, the Duma election is brought forward by two months from its scheduled date in December 2011 to October).
Luzhkov’s main asset has been his influence over the large and therefore crucial Moscow electorate – an influence originally based on his popularity but more recently on administrative clout (the Moscow city legislature election in October 2009 was blatantly rigged). To judge by his track record, Luzhkov would have aimed to use this electoral base as a bargaining chip to secure yet another term as mayor and/or as a way of influencing the future of the tandem itself – complicating what in any case is going to be a delicate discussion between Putin and Medvedev in the run-up to the 2012 presidential election.
Luzhkov’s claim to have the support of Putin was absurd. It was Luzhkov who, in alliance with Yevgeny Primakov, was Putin’s original competitor for supreme power in Russia in late 1999. Such things are not forgotten. Luzhkov has always opposed virtually all reform policies, including all those supported by Putin (such as the oil stabilization fund and the restructuring of the electricity sector). In my opinion, the intensity and significance of Luzhkov’s opposition to reform has been widely underappreciated. Luzhkov’s model was close to that of Alexander Lukashenko in Belarus: control of large-scale rents by a tight circle of family and cronies, while doling out sufficient crumbs to the populace to buy their support. Also, it was Putin who made the first conspicuous move against Luzhkov in 2009 by instigating the closure of “Cherkizon”, Moscow’s largest open-air market and a notorious pit of corruption.
Yet while Putin and Medvedev were clearly united on the Luzhkov question (as on all important matters), Luzhkov’s actions made it seem as if Medvedev stood alone against him. The unintended consequence is that Medvedev now emerges as a more powerful figure and with improved credentials – from the viewpoint of both the elite and the wider public – for a second presidential term. Those credentials will be further improved if the choice of successor to Luzhkov visibly reduces corruption and improves Moscow’s business climate. This will not be difficult. As highlighted in our April 2010 note, The regional trigger for the investment climate, Moscow makes many other Russian regions seem almost like Switzerland.
The whole episode of Luzhkov’s removal makes us stick to our unfashionable view (fully set out in The Putin-Medvedev tandem at mid-term, January 2010) that the path of least resistance in 2012 – that is, the path meeting the paramount criterion of not rocking the boat – will be inertia. That means a second term for Medvedev. This would be good for stability, good for the fight against corruption and for improving the investment climate, and therefore good for Russian asset prices.
Best regards,
Christopher Granville
Managing Director, Director of Russia Research
