A FREESTYLE SWIMMING RACE FOR TWO

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Dmitri Medvedev and Sergei Ivanov at the St. Petersburg Economic Forum

The unofficial competition between senior deputy prime ministers Dmitri Medvedev and Sergei Ivanov was one of the main events at the St. Petersburg Economic Forum on June 9-10. These “primaries” were a success: the two competed in liberal rhetoric, making it unnecessary for business leaders to discuss which one would make a better president for business in 2008.


The program for the St. Petersburg Economic Forum (SPEF) was designed so that the two senior deputy prime ministers could avoid crossing each other’s path or competing directly in their public statements. Nevertheless, almost everyone was comparing the statements made by Sergei Ivanov and Dmitri Medvedev – especially since they even chose different strategies for their presence at the SPEF: Ivanov concentrated his economic policy explanation into his speech at the forum opening on June 9 and a few brief comments at other forum events, while Medvedev barely appeared as a speaker at all, but made a great many brief comments.

For business circles, the major revelation from these “primaries” was the tone of statements made by Medvedev and ivanov. The two most influential officials in the Russian government were effectively competing with each other in liberal economic rhetoric. What’s more, contrary to established opinion in business circles, Ivanov frequently won this “liberal race” against Medvedev – some of his SPEF statements would have seemed bold, by today’s standards, even if they had come from Yegor Gaidar.

Ivanov’s sudden change of rhetoric left many disoriented. For example, he suddenly and resolutely described the Russian government’s economic goals as follows: developing competition and lifting any and all barriers to market access. Moreover, Ivanov said for the first time that establishing a competitive environment in the infrastructure and energy sectors is a priority, and spoke out firmly in favor of continued “restructuring of natural monopolies.” Ivanov even slipped into business jargon occasionally – and stepped onto Medvedev’s turf. He made hardly any mention of nanotechnology; his rhetoric concerning innovation-driven economic development was mostly mild and utilitarian. However, Ivanov boldly defined Russia’s socio-economic priorities to 2020 (becoming one of the world’s five largest economies on parity purchasing power, the middle class making up at least 50% of the population, accounting for 10% of global output of innovation-sector products) and endorsed the rhetoric of “moving away from an economy hooked on oil” – to the delight of Economic Development Minister Herman Gref.

Ivanov spoke in a purely prime-ministerial tone; Medvedev countered with a demonstration of direct involvement in key economic decision-making, described the government’s strategy on ruble appreciation, discussed investment legislation with foreign CEOs, and talked about future tax reform strategies and Russia’s position in WTO accession negotiations. Medvedev didn’t make any attention-grabbing speeches, but almost everything he said was later restated in a stronger and more definite form by President Vladimir Putin. All the same, the emphasis in Medvedev’s statements was also remarkably liberal – including an extremely constructive discussion of CIS development. In recent months, the CIS has been one of the more problematic institutions in the former Soviet Union.

Thus, both Sergei Ivanov and Dmitri Medvedev ended up ignoring most of the agenda pursued by the federal government over the past 18 months: from large-scale state investment in infrastructure projects and development institutions, to protecting markets from unfair competition and geopolitical rivalry. And investors seemed to view this as the major positive component of the SPEF. In fact, it might have been among the unofficial objectives for SPEF organizers: to demonstrate that neither of Putin’s potential successors will attempt to promote himself as tough and aggressive in relations with Western business circles. If so, the objective was achieved. By the end of the forum, everyone had stopped talking about which of the two senior deputy prime ministers would make a more satisfactory president from the private sector’s standpoint. Such talk had become pointless; at least, neither Medvedev nor Ivanov said anything that the private sector would consider fundamentally unacceptable.

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