EU-DIGEST

The New Kremlin Dreamers - by Michael Bohm

Several weeks ago in Voronezh, First Deputy Prime Minister Igor Shuvalov said the ambitious goals for "Strategy 2020" remain in place despite the economic crisis. He also said Russia has every chance of becoming the world's most desirable place to live by 2020. "This is no fairy tale," Shuvalov added, but if you examine the strategy closely, it certainly looks like one.

The most important ranking is not mentioned in Strategy 2020 at all -- the Transparency International's corruption index, in which Russia ranks 147 out of 180 countries in 2008. Corruption is particularly onerous for Russia's struggling small and medium-size businesses, which make up only 10 percent to 15 percent of the country's GDP. In the United States, small and medium-size businesses are the engine of economic growth, comprising roughly 50 percent of the country's private GDP and creating about two-thirds of net new jobs annually.

As long as Russian bureaucrats (and competitors) are free to terrorize businesses by creating "administrative barriers," extorting bribes and raiding, economic growth in the real sector will always be insignificant. To his credit, President Dmitry Medvedev is backing a new law to assist small businesses, which will, among other things, limit the number of government inspections of businesses. Most likely, however, these limitations will be easily sidestepped when bureaucrats simply extort a larger amount of money per inspection.

Labels: Dmitry Medvedev, Economy, Russia

Dmitry Medvedev after taking the oath of office as the new President of Russia in a solemn, emotional ceremony in the Kremlin's glittering St Andrew's Hall

For the complete report by swissinfo click on this link

Russia's Medvedev takes power - by Michael Stott and Oleg Shchedrov

Dmitry Medvedev was sworn in as Russian president on Wednesday and just over two hours later nominated his predecessor Vladimir Putin as prime minister, ushering in an unprecedented period of dual rule. Medvedev, a 42-year-old former corporate lawyer and longtime Putin ally, stressed freedom and the rule of law in his first remarks after taking the oath of office in a solemn, emotional ceremony in the Kremlin's glittering St Andrew's Hall. "I believe my most important aims will be to protect civil and economic freedoms," he told guests at the inauguration, broadcast live on state television. "We must fight for a true respect of the law and overcome legal nihilism, which seriously hampers modern development."Shortly afterwards, the government led by Prime Minister Viktor Zubkov followed protocol by resigning. This cleared the way for Medvedev to nominate Putin as prime minister as the carefully choreographed transition unfolded. The new leader, who arrived at the Kremlin alone in an armored black stretch Mercedes limousine flanked by 11 motorcycle outriders, inherits a booming economy fueled by high oil prices -- and a sobering set of challenges. They include rampant corruption, rising inflation, a falling population, sickly industry and agriculture and increasingly tense relations with former Soviet neighbors and the West.

Labels: Dmitry Medvedev, Russia