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Russia Reform Monitor - No. 1737

New anti-xenophobia measures enacted in Moscow;
Medvedev doubles down on "modernization"

Edited by Ilan Berman and Amanda Pitrof
August 5, 2011

June 14:

Russian officials are taking steps to reassure potential investors that the country's volatile political climate shouldn't deter them from investing in its economy. Concerns over the upcoming presidential elections have discouraged billions of dollars worth of investments,
according to Reuters, prompting the Kremlin to establish a $10 billion state-backed security fund as a way of insuring the investments of skittish speculators. Critics, however, have said that there will be little change in Russia's lackluster economic fortunes until the Kremlin begins serious work to “improve the rule of law and to combat rampant corruption.”

June 16:

In an attempt to counter burgeoning xenophobia, Moscow mayor Sergei Subyanin has launched a city-wide public relations and security campaign.
According to Radio Free Europe/Radio Liberty, new measures to be considered in Russia's capital will include cultural festivals, the banning of groups linked to nationalist violence, and the implementation of “social advertising.” Fears of a renewed uptick in ethnic and cultural tensions arose after the June murder of former army Colonel Yury Budanov, who became a hero to many nationalist groups after kidnapping and murdering a Chechen girl in 2003.

June 17:

The majority of Russians remain dissatisfied with the progress of democratization in Russia, a new poll has found.
The Moscow Times reports that 62 percent of people recently polled in an All-Russia Public Opinion Research Centre survey answered that they are “dissatisfied with the development of democracy in Russia.” This number, however, is down marginally from the 73 percent who were dissatisfied with domestic conditions twenty years ago. Meanwhile, those who believe the country is showing progress are largely supporters of the ruling "United Russia" party, are under 45 years of age, and generally active Internet users.

[Editors’ Note: Given the effect of Russia’s increasingly authoritarian political climate on pollsters and respondents alike, the results of public opinion surveys in Russia should be viewed with some caution.]

In what appeared to be thinly-veiled criticism of his mentor and current Prime Minister, Vladimir Putin, President Dmitry Medvedev has publicly cautioned against “one-man rule” in order to avoid a period of stagnation in Russia. Modernization and privatization were central topics in the president's speech before the St. Petersburg International Investment Forum,
with Reuters reporting
that the president ordering all state officials to vacate their positions on the boards of state companies by autumn. “We must not count all the time on high oil prices or on their constant growth,” he cautioned, before stressing the need to pursue modernization, regardless of who is in power. “Yes, modernization is difficult,” he concluded, “But we don’t have the right to wait.”

June 18:

A prospective 30-year gas supply deal between Russia and China has fallen through before a formal agreement could be signed,
Reuters reports. The landmark deal, which could have been worth as much as $1 trillion, was stalemated by squabbles over energy prices. Talks between Moscow and Beijing are expected to continue, however, since the agreement could prove to be beneficial for both sides - feeding China’s growing energy needs while allowing the Kremlin to diversify exports outside of Europe.