VZCZCXRO2701
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
DE RUEHMO #0318/01 0431541
ZNY CCCCC ZZH
O 121541Z FEB 10
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6217
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 000318 
 
SIPDIS 
 
E.O. 12958: DECL: 02/12/2020 
TAGS: PREL PGOV PMAR PHUM PINR ECON EFIN RS
SUBJECT: INSOR REPORT REINVIGORATES DEBATE ON POLITICAL 
 
REFORM 
 
REF: MOSCOW 199 
 
Classified ...

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 000318 SIPDIS E.O. 12958: DECL: 02/12/2020 TAGS: PREL PGOV PMAR PHUM PINR ECON EFIN RS
¶1. (C) Summary: Igor Yurgens' and Yevgeniy Gontmakher's "21st Century Manifesto" has re-ignited debate among elite groups about President Medvedev's economic modernization objectives and proposed political reforms. Yurgens and Gontmakher support Medvedev's broader modernization agenda and express optimism that Medvedev will implement their recommendations. Many liberals and some conservatives characterize the policy paper as an attempt by some business elites to preserve their wealth and influence, with little regard for the wider social implications (instability) of implementation. The authors' immediate challenge is to overcome the argument that more democratic freedoms will lead to political instability and another 1990's style economic decline. End Summary.
¶2. (C) During a press conference on February 3, Institute of Contemporary Development (INSOR) Chairman Igor Yurgens and respected researcher Yevgeniy Gontmakher unveiled a 68-page manifesto entitled "Twenty-first Century Russia: An Image of the Desired Future." In the proposal, Yurgens and Gontmakher call for major political change and outline an ambitious agenda including reducing presidential terms from six to five years, restoring the direct election of governors, ending tight state control of the media, and dissolving the domestic surveillance practiced by the Federal Security Service (FSB). Their paper compiles proposals by researchers and analysts who believe that Russia faces a tough choice: reform political and economic systems now, or risk further decline as talented youth emigrate and social divisions deepen.
¶3. (C) Yurgens and Gontmakher held another briefing February 10 for diplomats, journalists, politicians, economists, and government officials. Gontmakher noted that Russia was capable of modernizing politically and economically, but the adjustment would require at least 10 years. He added that under existing conditions, economic reform was impossible, as the economy was "strangled by the bureaucracy" and vested interests. Political reform, in his view, was a precondition for economic transformation.
¶4. (C) Former Finance Minister Yevgeniy Yasin, Alexander Dynkin, and Dmitriy Oreshkin expressed their support of the report's conclusions. Russia, they said, was decades behind other developed countries in terms of GDP and life expectancy. Presenters said that President Medvedev and Prime Minister Putin together could slowly implement the reforms. Neither Yurgens, who only stayed for opening remarks, nor Gontmakher, provided a roadmap for how the controversial changes would occur or who within the government was prepared to support them.
¶5. (C) Liberal commentators generally have praised the Yurgens/Gontmakher report for reviving debate on political reform. Some observers focused on Yurgens' connections to Medvedev (NOTE: Medvedev is the chairman of INSOR's Board of Trustees. End Note). They describe the release of the report as an attempt by Medvedev's supporters to encourage him not to give up the pursuit of political reform. Dmitry Oreshkin told us privately that he was encouraged by the INSOR report. Oreshkin, who is a member of President Medvedev's Council on Civil Society, lamented that Deputy Presidential Administration Chief Vladislav Surkov had not given President Medvedev Oreshkin's report on improving the election process. Oreshkin noted that Yurgens also had proposed election reforms in his report and hoped that President Medvedev would consider them.
¶6. (C) Deputy Director of the Institute for Social Systems, Dmitriy Badovskiy, does not expect this report to create serious differences between the Medvedev and Putin camps. He contends that the changes the authors suggest are indeed so radical that there is little chance Medvedev or Putin would implement them before the 2012 presidential elections. Political opposition leader Boris Nemtsov argued that, while the report's ideas might be worthy, "Russia's present leadership is interested only in preserving its power and influence through perpetuation of the status quo, not through any new political framework."
¶7. (C) Many of United Russia's leaders have reacted negatively to ideas in the report. United Russia Duma Member Vladimir Pligin commented that it is too early to change the constitutional amendment (which just went into effect in MOSCOW 00000318 002 OF 002 2009) to extend the presidential term to 6 years. Valeriy Fadeyev, Chairman of United Russia's November 4 Club, charged that implementation of the Yurgens/Gontmakher recommendations would lead to the "Ukrainianization" of Russian politics. Fadeyev's comments may reflect his desire to support Medvedev's economic modernization agenda, while protecting himself from Putin loyalists who are suspicious of his agenda (reftel). Other critics cite the report's vision of Russia as a NATO member in 20-30 years as a demonstration of the authors' inability to comprehend Russian political realities or long-term interests.
Comment -------
¶8. (C) Yurgens and Gontmakher deserve credit for their courageous, forward-leaning proposals and blunt assessment of the current dysfunctional political system. Their reforms appeal to the politically savvy business elite with the indirect message that United Russia is just a political machine with one objective -- delivering for its leader, Vladimir Putin. Yurgens and Gontmakher contend that political change is necessary to develop a substantial middle class, modernize the economy, and ultimately improve Russia's future. They write off those who have already abandoned hope, and instead focus on those, like Oreshkin, who still believe that Russia can change direction. They know that political change and economic development are not mutually exclusive but rather complementary and should be pursued jointly. At the very least the report broadens the limits of what can be discussed seriously and publicly.
Beyrle