October 2, 2007 / 11:28 AM / 12 years ago

Putin to stay in power, but risks remain

MOSCOW (Reuters) - President Vladimir Putin has clearly signalled he will keep a grip on power after his term ends next year but to do so he will need to overturn long-held conventions on how power is exercised in Russia.

Putin sprang another of his trademark surprises on Monday, accepting an offer from the country’s biggest political party United Russia to head its slate for parliamentary polls in December and suggesting he might be a future prime minister.

In a country hunting for clues about Putin’s future after his second term ends in 2008, the president’s words were seized on as solving the mystery of how he would stay in power without office. The constitution bars a third consecutive term.

“Putin has once again shown his ability to change the country’s political system without amending the Constitution,” the financial daily Vedomosti said in an editorial comment.

Investors hailed Putin’s signal he would keep power as a sign that the policies which have led Russia through an unprecedented eight-year economic boom would continue. Stock prices rose.

“We believe the news should be fairly positive for the market, as this makes it more likely that there will be greater continuity in government policy,” said Roland Nash, head of research at Moscow investment bank Renaissance Capital.

FAST GROWING ECONOMY

Despite rampant corruption and growing limits on domestic press freedom and opposition politics, foreign investors have reaped rich rewards from the fast-growing economy, which has made Russia one of the world’s most attractive markets.

But others warned that Putin’s strategy also had risks in a country accustomed to supreme power being vested in one man.

“The people with power in the Kremlin may be happy to see some additional powers accruing to the prime minister, but would they support a radical change that would effectively see power shift from the office of the president to the prime minister?” asked Chris Weafer, chief strategist at Moscow investment bank Uralsib.

“Critics of Russia’s democratic process will see this as a further example of the return to the power structures of the Soviet Union. In that period the formal head of government was merely the figurehead, while the real power lay with the head of the Communist Party.”

Today, the prime minister’s role in Russia is very limited. The premier has no say in foreign policy, no control over the ever more powerful security and intelligence services and can be dismissed by the president.

Putin’s three prime ministers have focused on economic policy and been seen as subservient to the Kremlin — something the president would need to reverse if he wished to stay in control.

“In the system as it currently functions, the prime minister’s job is full of all the things Putin is bored with,” one senior diplomat said.

Putin would need to make the premier’s job more powerful.

Commentators suggested that Putin could move the key “power” services such as the FSB spy service from the presidency to the prime minister’s office to beef it up.

SECURITY SERVICES

“Control of those services is not specified in the constitution and could thus be transferred,” Moscow’s Alfa Bank said in an e-mailed commentary.

To do so, Putin would require what is called a “constitutional law” change, requiring a two-thirds majority in the Duma. The government currently enjoys such a majority.

Assuming Putin does not change the constitution to seek a third consecutive term, he still has to find the “decent, capable and modern person” he said on Monday he needed as president before he could become prime minister.

Putin’s last political surprise — the appointment as prime minister last month of Viktor Zubkov, a little-known confidant and former communist collective farm boss — has automatically created a powerful new possible presidential candidate.

Previous favourites Dmitry Medvedev and Sergei Ivanov have faded somewhat in the public eye since Zubkov’s appointment, which came with unusually lavish praise from Putin.

Some commentators say the identity of the next president — once the focus of huge attention — is no longer so important.

“Now it is evident that Putin isn’t leaving and it doesn’t matter what post he will hold,” said Alexei Venedictov, editor- in-chief of radio station Ekho Moskvy. “In any case he will ‘walk away’ with his powers to the next job.”

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