The New Nation - Internet Edition

Eric S. Margolis

LAST February, as millions of fascinated viewers watched on TV, Russia's new leaders, 55-year old Vladimir Putin and 42-year old Dimitri Medvedev, showcased their new duumvirate by confidently strolling from the Kremlin across Red Square to attend a concert of the rock band, Deep Purple. Forget 'Swan Lake.'

Decked out in hip black leather jackets and tailored jeans, they symbolised the new, youthful, self-assured Russia of 2008. The grey homburg hats and dumpy, ill-fitting suits of the Communist era were a thing of the past.

This week, Dimitri Medvedev, Putin's long-time protégé and hand-picked successor, was inaugurated president of Russia. Putin, who heads the United Russia Party, the nation's largest, became prime minister. Just to remind everyone that in spite of the rock concerts and cool haircuts, Russia remains a warrior nation with a glorious military tradition, the Kremlin also staged the biggest military parade since 1990. Impressive, certainly, but the whole world was asking, 'who's the boss of Russia?' Good question. My view: Putin, who laments the Soviet Union's collapse as the 'greatest geopolitical catastrophe of the century,' may be replicating the old USSR's power structure. The Soviet Union had two parallel governments. A civilian one, with a president, legislature, and ministers; and a mirror structure run by the Communist Party. Real power was held by the Party's General Secretary and Politburo who made all important policy decisions, and the security organs. The civilian government was charged with implementing them.

We can envisage a similar dual arrangement in Moscow wherein Putin fills the role of the old Soviet General Secretary and Medvedev that of Soviet presidents.

The business-minded Medvedev is former head of Gazprom, Russia's giant energy firm. He will likely become the nation's energy czar and focus on economic development and raising living standards. Putin, formerly of KGB's elite First Directorate, will focus on foreign policy and rebuilding Russia's military and diplomatic power.

Theoretically, their roles should be reversed, with the president handling security policy and the prime minister domestic issues. But it's hard to imagine former spy chief Putin digging through farm reports and industrial statistics.

Vladi and Dimi, as they are known, are sitting on a bonanza. Russia has 20 per cent of the world's natural gas reserves, and at least 7 per cent of proven oil reserves, some 75 billion barrels. However, Russia's huge reserves are in remote regions and will require vast investment to further exploit. Even so, as energy prices soar, Russia grows wealthier and more powerful by the day, a sort of Saudi Arabia with snow.

Interestingly, Russia today commands far more influence over Western Europe than it did when 100 Red Army divisions threatened the continent to the point where France actually began re-arming the Maginot forts. Russia's Gazprom now account for nearly 40 per cent of Germany and Ukraine's gas consumption, 33 per cent of Italy's, 26 per cent of France's heating needs, 70 per cent of Austria's, and almost all of Eastern Europe's gas. Moscow does not need tanks to threaten or influence Europe. If the Kremlin turns off the gas export tap, as it recently did to late-paying Ukraine, Europeans will shiver in the winter cold. Washington is deeply alarmed by Russia's growing energy clout. Until recently, the US controlled much of world energy through its domination of the Mideast. Now, Russia is challenging America's Oil Raj and Washington is struggling to develop new pipeline routes to circumvent Russia's fast expanding pipeline network.

Prime Minister Putin can look back on his eight-year presidency with satisfaction. He mercilessly crushed the life out of the Chechen independence struggle, as he promised. Thanks to high energy prices, in part caused by the US invasion of Iraq, he doubled Russia's national income, restored pensions, and restored national pride. He thwarted the Clinton administration's attempts to establish political and economic US tutelage of post-Soviet Russia, and pulled Russia out of bankruptcy.

Putin and Medvedev must continue dealing with Washington's violation of secret, 1990-1991 agreements with former Soviet leader Mikhail Gorbachev not to advance NATO any further east in exchange for Moscow freeing Eastern Europe.

In spite of Putin's crushing democratic government and free expression, his approval ratings run over 60 per cent. If Putin and Medvedev can avoid falling out, and continue fruitful teamwork, they are well placed to restore Russia as a global power and turn this long-suffering nation into tomorrow's economic success story.

(Eric S. Margolis is a veteran American journalist and contributing foreign editor of The Toronto Sun)