MEDVEDEV'S ASSESSMENT - 2008, A YEAR OF DIVERSE

C O N F I D E N T I A L MOSCOW 003757

SIPDIS

E.O. 12958: DECL: 08/15/2017
TAGS: PGOV PHUM PINR RS SOCI
SUBJECT: MEDVEDEV'S ASSESSMENT - 2008, A YEAR OF DIVERSE
CHALLENGES

Classified By: Acting DCM Kurt E. Amend. Reason: 1.4 (d).


1. (SBU) Summary. Russian President Medvedev took to the air
on December 24 to speak on the three most important events of
the year past: his inauguration, the war in Georgia, and the
economic crisis. He reminded the audience of his legal
responsibility as commander-in-chief and took personal
responsibility for the decision to send troops into Georgia
in August. Medvedev tracked with the tandem message on the
financial crisis: emphasizing that the crisis came from
abroad; promising to maintain social gains; and disavowing
any "radical" moves like the 1998 de-valuation and default,
although he did call for "more flexibility" with the ruble.
He was on message about military reform plans, expressed
cautious hope for an improved relationship with the US, and
took a firm position that Ukraine "must pay" its gas debt
(even as he called for closer relations with other CIS
states). The interview did not make much of a splash in the
Russian media, leaving the impression that his performance
had far less impact than the Premier's "direct line" call-in
show earlier in the month that many saw as evidence of
Putin's continued dominance of the tandem. The fact that
Medvedev feels he has to reassert his independence from Putin
only serves to confirm that analysis. End Summary.

The Year in Review
--------------


2. (SBU) Medvedev spoke for an hour and a quarter on the
three main government-controlled television stations -
Channel 1, Rossiya, and NTV - in a stage-managed interview,
hosted by the respective three heads of the their information
programs. After highlighting the positives of the year,
including sports victories and "creative triumphs," he
immediately honed in on two critical events: the war in
Georgia and the financial crisis. He spoke with candor and
provided insights into his personal experiences as President
-- a marked contrast to the normally "business only" Putin.


3. (SBU) Speaking on the war in Georgia, Medvedev recounted
his experiences in early August and described how he learned
about developments in South Ossetia and his reactions to
them. He again placed all blame on Tbilisi for the attack on
South Ossetia and defended Russian involvement as morally
correct. He expressed pride that the Russian military had
"dealt a full and irreparable blow" to the Georgian military
with only minimal losses. Emphasizing his authority,
Medvedev said that despite his close relationship with Putin,
some decisions fell to him alone -- notably ordering Russian
troops to battle. He explained that some judgments must be
made quickly and that he had "no one to consult" when he gave
the order to commit Russian troops. He reiterated that
"final responsibility for what happens in the country ...
rests on my shoulders alone and I would not be able to share
this responsibility with anyone."

Economic Woes...
--------------


4. (SBU) Medvedev appeared to follow Putin's lead on the
economic crisis and Russia's response, accentuating that the
crisis resulted from the US financial crisis, but noting that
Russia's comparative lack of economic development created
unique challenges. Medvedev promised to defend Russia's
social gains, disavowed any GOR default or re-denomination of
the ruble, although he called for "a little more flexibility"
in the exchange rate, and for business to preserve the
workforce -- an appeal that echoed Putin's earlier statement
that the goal should be protecting workers rather than
maximizing profit.


5. (SBU) Medvedev expressed his pique about what Moscow sees
as foot-dragging on implementing decisions made at the G-20
in Washington, including the establishment -- with Russian
participation -- of special economic fora. (Medvedev made no
mention of the protectionist measures that the government has
enacted to protect the automotive and agricultural equipment
industries that go against the Washington agreements.) He
emphasized that a "national solution" to Russia's economic
crisis was not possible, and that difficulties would continue
until "our colleagues" abroad came up with suitable remedies.

... Won't Change Priorities
--------------


6. (SBU) Despite the economic hardships, Medvedev insisted
that his administration's objectives would not change. He
promised to protect the social gains made over past years,
including wage levels, real incomes, and pension payments
(without elaborating how he would pay for those benefits).
Moreover, he argued that the Russia must emerge from the

crisis strengthened, using the economic difficulties to
increase labor productivity and to make production more
efficient. Ultimately, Medvedev returned to the mantra that
Russia must become less dependent on natural resource exports
and diversify, in order to be better situated to ride out
global economic downturns.


7. (SBU) Medvedev also held firm to his administration's
plans for military reform. He rejected any suggestion of
dropping the one-year enlistment for conscripts, expressed
support for plans to cut the number of officers, and
reiterated his commitment to transition to service in "combat
ready" units. He also repeated his call for re-equipping the
military while improving the social situation for soldiers
and officers.

Tough on Ukraine
--------------


8. (SBU) Medvedev also addressed a few questions about
foreign policy issues. He expressed satisfaction with his
relations with other world leaders, especially his partners
in the CIS Collective Security Treaty Organization (CSTO) and
the Shanghai Cooperation Organization (SCO). He said that he
hoped for "partnership and nothing else" in his relations
with the U.S. and noted his phone conversation with
President-elect Obama.


9. (SBU) His comments on Ukraine -- especially his acerbic
condemnation of Kiev's military support to Georgia and his
insistence that "it is time for them to pay" for their gas
debt -- were emblematic of Moscow's public hard line in the
gas dispute. In typical Kremlin fashion, he dismissed
Ukraine's turbulent democracy as being anything but effective
and promised that Russia would meet its commitments to its
European gas customers if supplies were cut to Ukraine -- an
impossible feat, considering Kiev's control over the export
pipeline.

Comment
--------------

10 (C) Looking at Medvedev's interview through the prism of
inter-tandem politics suggests that his team sought to
balance Putin's impressive performance during the "direct
line" call-in show -- political theater that many saw as the
Premier's message to the elite that he remains in charge.
That Medvedev has to assert his independence as the principal
decision-maker suggests a certain insecurity and is at odds
with many in the elite who are aware of Putin's direct
involvement in the course of events in August. Conversely,
Medvedev's acceptance of responsibility for "what happens in
the country" could be a first step in setting the President
up to take the fall for the potential failure of Russia's
anti-crisis measures or potential future actions to protect
the political order. Substantively, there continues to be
little daylight between Medvedev's and Putin's public
commentary and apparent agreement on the proper course for
Russia's crisis management and foreign policy orientation.
Medvedev's tap dance about the failure of the international
community to find solutions to the global economic crisis
allows the tandem to continue to blame the "outsiders" for
Russia's problems without acknowledging the structural
weaknesses of the Putin system.
End Comment.
RUBIN