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Financial Times (UK), May 30, 2003

A tactician seeking a strategy

By Andrew Jack

As Vladimir Putin plays host to dozens of world leaders this weekend in his native St Petersburg, Tamara Stelmakhova remembers the serious boy she taught more than 30 years ago.

Still a teacher in the city's School 281, where Russia's president spent his last two years before starting a law degree, she recalls: "He was one of those rare students to be very clear about his future. He was focused, with a strong character."

It is these traits that have carried Mr Putin, 50, from a childhood in a crowded communal apartment to the palace of the Kremlin. Back to his home, the Russian leader will be, for today at least, the focus of attention of a world community bitterly divided over the war in Iraq.

After spending much of his career in the shadows, first in the KGB, followed by a decade in the St Petersburg city administration and then in the backrooms of the Kremlin, Mr Putin has become a skilful and popular politician. And as this weekend's gathering of prime ministers and presidents, including George W. Bush, bear witness, Mr Putin has emerged from the crisis over Iraq as a more respected world leader, in Europe at least, and with strong support at home. Having stood with France and Germany against what he argued was an unjustified invasion, the Russian leader has escaped America's popular scorn and diplomatic punishment meted out to his French and German counterparts.

And yet three years into his presidency, and with less than a year to go to the election, it is far from clear what Mr Putin wants to achieve. He may be a master tactician, but foreign and domestic strategies are less clear.

"Putin is the continuation of the tradition of the Imperial double-headed eagle," says Lilia Shevtsova, a political scientist and author of Putin's Russia. "It's very difficult to reconcile different parts of the Russian public, and point in a single direction. He does not have the vision, the ability or the resources."

This duality is a hallmark of his policies. In foreign affairs, he has taken an increasingly pro-western stance - rewarded by the attendance of so many western leaders at his St Petersburg celebration this weekend.

Ms Shevtsova argues that Mr Putin - like his hero Peter the Great, who founded St Petersburg 300 years ago as a "window on Europe" - is "a westerniser, at least existentially". She suggests that over Iraq, for example, he resisted the impulse of all previous Soviet and Russian leaders by not attempting to save Saddam Hussein, or to play off Europe against the US.

And yet Mr Putin has not aligned his country fully with the west, however divided the west may be. There are potential flashpoints ahead in foreign policy, notably given Russia's traditional and continued commercial interests in countries such as Iran and Syria. Some argue his stance on Iraq was inspired by advice from Soviet-era military and intelligence sources.

In domestic policy, the Kremlin's approach is even more muddled with market liberalisation countered by protectionist gestures and the preservation of large state monopolies. Often it lacks the means with which to implement its objectives. In his state-of-the-nation address to Russia's two houses of parliament last month, Mr Putin proclaimed a clutch of ambitious and populist ideas - a reduction of poverty, doubling the size of the economy by 2010, military reform - but gave little indication of how these might be achieved.

The address was a reminder that Russians divide broadly into three groups: those wanting a return to the Communist system, those pushing for liberal-style reform, and the majority still trying to find their bearings after a decade of post-Soviet turmoil.

Boris Makarenko, deputy director of the Centre for Political Technologies, a Moscow think-tank, says the president's greatest skill has been to appeal simultaneously to such varied groups. That means his personal popularity rating has never dipped below 70 per cent, while that of his government is much lower.

"He has really united the nation, whereas under [his predecessor Boris] Yeltsin, a considerable section of the population did not accept his regime as their own," he says. Mr Putin has proved "a reluctant liberal", pushing through a series of market reforms because he recognises that there is little alternative to the market economy - whatever his personal instincts might be.

Others accuse the Russian leader of hesitating until he is forced to make a decision, and there are many decisions to take in Russia's highly centralised system. Whatever his convictions, Mr Putin has frequently reached the limits of his power when attempting to put his reforms into practice, in the face of opposition from corrupt bureaucrats and lobbying by big business leaders and regional politicians.

Vladimir Litvinenko, rector of the St Petersburg State Mining Institute, where Mr Putin wrote a doctoral thesis that he helped supervise, says: "Russia needs a system of market relations, and an effective implementing state."

Mr Putin has a long way to go. Russia still lacks a fair legal system. Repeated calls from the Kremlin for modernisation of the civil service have met with little response. Restructuring of the gas and railway monopolies has not yet begun, and changes to education, health and social services are far off. While Russia appears currently to be doing well, Grigory Yavlinsky, leader of the liberal Yabloko party, contends that the country is experiencing an "economic hallucination".

"The political elite is like a frog in a kettle of water on the fire," he says. "As long as the oil price is high, Moscow looks like one of the top cities in Europe. But the heat is rising. We need to liberate the state from oligarchs and monopolies."

Mr Makarenko says: "Putin's biggest problem is that he rose too quickly, without being well versed in who was who by the time he reached the top. The people he trusts are insufficiently capable of doing the job."

Luck has played a significant part in Mr Putin's success so far, even if he has used it well. The in-fighting and instability under Mr Yeltsin created a public desire for the tighter control and stability that the former KGB officer could instinctively provide.

The fight against international terrorism in the wake of September 11 2001 has provided cover for his campaign against separatists in Chechnya. Rises in world commodity prices and the import-substitution effects of Russia's rouble devaluation in 1998 provided a substantial boost to the country's economy, adding a veneer of success to his liberal reforms.

But at some stage, his critics argue, substance must fortify symbolism. Not far from the freshly painted facades and repaved streets of St Petersburg are the potholes and crumbling communal apartments of the Soviet-era city and the poverty and homelessness of post-Soviet Russia. Mr Putin may need more than tactical deftness


Financial Times (UK), May 30, 2003

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