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May 8, 2008
Protégé in Russia Is Sworn In
By C. J. CHIVERS
MOSCOW — Dmitri A. Medvedev, the Kremlin insider and unprepossessing
lawyer who had never held elected office before, was sworn in as
Russia’s president on Wednesday inside the Grand Kremlin Palace.

The ceremony, mixing czarist splendor with signs of renewed Russian
confidence, marked the passing of formal power from departing
President Vladimir V. Putin to his young and untested protégé.

But the events served as well as a tribute to the enduring power and
popularity of Mr. Putin, who Mr. Medvedev nominated as prime minister
within hours of taking office.

Mr. Putin, a former K.G.B. leader who presided over Russia’s economic
revival but also consolidated power, rolled back civil liberties and
led a government beset with corruption, arrived at the ceremony alone
and before Mr. Medvedev.

In a departure from past inaugurations, the outgoing leader addressed
the audience of more than 2,000 guests before the new president took
his oath of office, saying that he had lived up to his promise, made
eight years ago, to serve the country and its citizens faithfully.

His remarks appeared to presage the continued presence of Mr. Putin’s
hand on the levers of Russian power.

“It is extremely important for everyone together to continue the
course that has already been taken and has justified itself,” he
said.

Only then did Mr. Medvedev, 42, approach the lectern, rest his hand on
a copy of Russia’s constitution, and utter the oath of office.

In a brief address afterward, he touched on themes he has embraced
since Mr. Putin selected him as his successor late last year,
including improving living standards, education and medical care, and
modernizing Russia’s narrow economy.

“I would like to assure all of the citizens of this country that I
will be working to my fullest capacity,” he said. “I fully realize how
much has yet to be done.”

Mr. Medvedev also stressed the importance of civil rights, as he has
in several speeches since he became the most likely successor to Mr.
Putin.

The ceremony was brief. But the two leaders’ paired comments neatly
framed the palpable questions about what the inauguration will mean
for Russian politics and future direction of the country.

Will Mr. Putin remain the nation’s preeminent politician and policy
setter? Or will Mr. Medvedev, whose career has been spent in his
sponsor’s shadow, have the ability and power to choose the country’s
course?

Mr. Medvedev has no known history as a member of the nation’s security
services, whose members climbed through the ranks of government and
business under Mr. Putin to become a pervasive and dominant national
force.

Mr. Putin managed to stay atop these often quarreling government
clans, and to manage their disputes and secure enough of their loyalty
to keep a hold on power and create the impression of a stable state.

Whether Mr. Medvedev will be able to navigate the country’s
bureaucratic and business disputes alone is not clear.

Mr. Medvedev has also presented himself in paradoxical terms. He had
often complimented the style and achievements of Mr. Putin, but at
times appeared to champion the rule of law and the importance of human
rights, both of which faced intense pressure during Mr. Putin’s two
terms.

The Kremlin plans to crown the occasion of the swearing in of the new
president on Friday with a triumphant military parade in Red Square of
a sort not seen since the cold war years, complete with flyovers of
strategic bombers and rumbling columns of tanks.

Mr. Medvedev is Russia’s third post-Soviet president and newest source
of speculation. He has presented a puzzling self-portrait, at times
suggesting that major changes are necessary — including attacking the
country’s manifest corruption and reducing the bloat of its
bureaucracy — and at other times insisting that he will broadly follow
the path chosen by Mr. Putin, his sponsor.

There is no doubt, however, that he is taking charge of a portfolio
and a position more difficult than the celebrations will suggest.

The policy challenges are unenviable, even if Russia has recovered
from its severely weakened state. Mr. Medvedev faces steeply rising
inflation, an outsize bureaucracy, pervasive corruption, a weak
judicial system and a population decline fueled by a low birthrate,
substandard health care and poor public health.

The economy is narrow and excessively dependent on natural resource
wealth, while many sectors — including agriculture and high technology
— are underdeveloped.

Mr. Medvedev also faces tensions in the Caucasus, along Russia’s
mountainous southwestern border, where Georgia, a former Kremlin
satellite, has accused Russia of beginning to annex the separatist
enclave of Abkhazia, and of risking war.

Moreover, Mr. Medvedev will rule through a new governing model and
with an uncertain power base. His stature has been undermined even
before his inauguration by reports that Mr. Putin intends to continue
wielding power from the prime minister’s suite.

One Russian newspaper reported this week that Mr. Putin planned to
increase the number of deputy prime ministers almost twofold,
providing jobs for his entourage and institutionalizing the notion of
a strong premier who controls most of the affairs of state.

Stephen Sestanovich, a senior fellow at the Council on Foreign
Relations in Washington, said that whatever policy choices Mr.
Medvedev ultimately made, the degree to which he would be able to
pursue his own vision for Russia’s future, as opposed to being
confined by Mr. Putin, was not yet clear.

“Does he have any power?” Mr. Sestanovich said. “Is he a decorative
figure?”

He added, “Of course, we just don’t know about any of that yet.”

By many measures, and despite some spectacular setbacks and missteps,
Mr. Putin’s years of rule were accompanied by a variety of
accomplishments, all unforeseen when he stepped from spymaster
obscurity eight years ago.

Personal incomes for many Russians rose sharply, Russian troops and
their proxies defeated and marginalized the bulk of separatist forces
in Chechnya, and the Kremlin paid down foreign debts ahead of
schedule.

The value of the Russian stock market skyrocketed. The country’s main
cities entered construction booms, and urban shops filled with goods.
Consumer lifestyles and foreign vacations became available to a large
segment of the population for the first time.

Mr. Putin simultaneously played foil to the United States, hosting or
meeting national leaders at odds with Washington: Aleksandr G.
Lukashenko of Belarus, Hugo Chávez of Venezuela, Islam A. Karimov of
Uzbekistan and Mahmoud Ahmadinejad of Iran, among others.

He reminded his audiences that he had consistently opposed the
invasion of Iraq and what he called American interference in the
domestic affairs of former Soviet states.

After the economic collapse and public embarrassments that accompanied
the administration of President Boris N. Yeltsin, national pride was
significantly restored. Many Russians now plan for their futures in
ways they could not a decade ago.

But fresh problems have emerged, and problems that thus far have
eluded Kremlin solutions remain. Mr. Medvedev, who favors yoga over
Mr. Putin’s sport of judo, faces several problems that continue to
darken projections about Russia’s future.

Chief among them, said Anders Aslund, a senior fellow at the Peterson
Institute for International Economics, in Washington, are inflation,
the poor state of public infrastructure and endemic corruption.

During Mr. Putin’s first year in office, oil prices were $20 to $30 a
barrel. Today, oil prices hover around $120. Russia is the world’s
largest energy exporter, and the oil price spike accounted for a large
part of Russia’s economic turnaround.

But the hot economy has created new pressures. The cost of living has
soared, pushed upward by a real estate bubble and climbing prices for
utilities, gasoline and food.

Inflation has topped 13 percent, spreading dissatisfaction and worry
among many Russians, especially pensioners, who remember the inflation
of the 1990s. The middle class is pinched, too. This month, gasoline
prices reached nearly $1 a liter, more than $3.50 a gallon — a
considerable expense for a nation with typical household income still
a fraction of that in the West.

Several Russian officials have hinted that Russia will soon allow the
ruble to strengthen as a means of cooling down the economy. “A main
concern is to bring down inflation, and the only way to do it is to
let the ruble float upwards,” Mr. Aslund said. “I think that Medvedev
will get on the strong ruble bandwagon.”

Long-term solutions are more challenging. Oil production has begun to
decline, and Russia’s infrastructure largely dates to Soviet times.
The huge investments required to revive both would create more
inflationary pressures.

Mr. Aslund said efforts at capital investment risked being squandered
by corruption, which is so pervasive that kickbacks on public works
and energy projects can reach 50 percent.

“You can’t build infrastructure if half the invested money has to go
to kickbacks,” he said.

Mr. Medvedev also assumes the presidency of a nation at risk of a
sharp population decline.

Russian public health is poor enough, and the birthrate low enough,
that even as Russia has transformed itself, its population has shrunk.
Mr. Putin introduced incentives two years ago to encourage women to
have more children. In 2007 there was an increase in the birthrate and
a small decrease in the death rate.

But Murray Feshbach, a demographer who studies Russian public health,
said the demographics still looked bleak, in part because the number
of women from 20 to 29 years old — those who in Russia account for
most births — would begin to decline in 2012.

The population is also infected with tuberculosis at more than twice
the rate considered an epidemic by the World Health Organization.
Deaths from AIDS are rising. An outbreak of hepatitis C, which has a
long gestation period, is anticipated within five years.

Without comprehensive programs to contain those diseases and reduce
the death rate, Dr. Feshbach said, Russia risks a dwindling labor pool
and further declines in the size of its armed forces in the decades
ahead.

“You have to attack all of these problems simultaneously,” Dr.
Feshbach said. Otherwise, he added, “the basic thrust is downward and
downward.”

Mr. Sestanovich said there had been signs in Mr. Medvedev’s speeches
that he saw the world in ways different from his predecessor. He has
called for outside experts to challenge the government’s thinking,
emphasized the need to shrink the government’s size and powers, and
challenged the assumption, integral to centralized planners, that the
state must produce prosperity.

“He’s not just running against the ’90s, as Putin did,” Mr.
Sestanovich said. “There is a kind of awareness in Medvedev that he
has to deal with things that went a little wrong under Putin.”

He added that some of the tasks Mr. Medvedev had set for himself might
be beyond his immediate reach, and that they would provide a means
over time to measure his power. “Reeling in the power of the state
bureaucracy?” he said. “That’s a pretty tall order.”

Michael Schwirtz contributed reporting.

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