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Financial Times: Head of Russia Inc mixes ruthlessness with diplomacy

By Quentin Peel in London
Published: December 11 2007 02:00 | Last updated: December 11 2007 02:00

The anointment of Dmitry Medvedev, Russia’s first deputy prime minister, as heir apparent to Vladimir Putin is, on the face of it, confirmation of continuity in the Kremlin – and of Mr Putin’s intention to remain the power behind the throne.

As the president’s former chief of staff, deputy chief of staff and a close associate from Mr Putin’s days as deputy mayor of St Petersburg in the early 1990s, Mr Medvedev could scarcely be more intimately associated with his boss, always in a firmly subordinate role.

The second most important fact about Mr Medvedev is that he has not apparently been a member of any part of the Russian or former Soviet security complex such as the Soviet KGB, today’s FSB, or the military-industrial establishment. His greatest rival to be Mr Putin’s chosen candidate for the presidency, Sergei Ivanov, was a member of the elite international division of the KGB and has latterly been minister of defence.

Mr Medvedev is not a member of the so-called siloviki – present and former security people – surrounding Mr Putin, but rather of the St Petersburg faction, from whose ranks have been drawn all the main economic reformers in the government. He is a representative of Russia Inc, a country that is driven more by its business interests than by insecurity and prickly nationalism. Gazprom, the state-controlled energy group where he is chairman of the board, is the ultimate example of that New Russia.

As far as the rest of the world is concerned, there is unlikely to be a chink of light between him and the outgoing president on foreign or domestic policy, at least in the short to medium term. But he is a younger man – five years younger than Mr Putin was when he became president in 2000 – and his language is much milder: he lacks the harsh Chekist tones and defensive world view of the former KGB man. In the longer term, if he can creep out from under Mr Putin’s shadow his different style could become a different policy.

A President Medvedev will still have to represent all the factions in the Kremlin, including the siloviki . As he is not one of them, he may be seen as less threatening to them all.

As first deputy prime minister, his focus has been on domestic policy. At the World Economic Forum in Davos in January he commented on Kosovo, saying that “this problem cannot be resolved in isolation” from other “frozen conflicts”. He added: “If this problem is solved in one way in one location, then a similar mechanism for solving similar problems may at least be proposed in another location.”

That suggests a very Russian nervousness about any small entity unilaterally declaring independence from a bigger country. It could be taken as a threat (to neighbouring Georgia), or a fear that parts of Russia may well still be tempted to secede.

Mr Medvedev’s English is good, but not as fluent as that of Mr Ivanov, who has been more outspoken in his criticism of US and European policies towards Russia and its near abroad.

Mr Ivanov is also instinctively more statist, and more closely aligned to Mr Putin’s determination to revive Russia’s international status.

At Gazprom, Mr Medvedev has been seen as “his master’s voice”, but also as a conciliator rather than a dictator.

“He intervenes when there are very high-level negotiations which need to come to a decisive conclusion,” says Christopher Granville of Trusted Sources, a Russia analyst who has predicted Mr Medvedev’s emergence as the chosen candidate for the past year.

“He was publicly involved in both the Shell Sakhalin venture and in BP’s Kovykta gas field”, when Gazprom forced its way into the two biggest foreign-owned energy projects in Russia. “He explained the deals, and presented them as a reasonable compromise.”

That suggests a combination of ruthlessness and diplomacy. It says a lot about Russia today that the chairman of Gazprom – the ultimate national champion and a state within the state – is the man almost certain to become the next president.

Copyright The Financial Times Limited 2007

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