Executive Summary

After the election of a new State Duma last month and a string of high level personnel changes within the Russian elite, PBN H+K Moscow has identified several trends that we believe will define Russia’s development in the coming years:

  • Centralization of power in preparation for 2018 Presidential elections: replacement of the “old guard” with younger figures is likely to continue as President Vladimir Putin moves into a new phase of his rule:
    • These changes are likely to be followed by a reorganization of the government structure, with officials from law enforcement and intelligence backgrounds gaining more power within a new distribution of roles;
    • As Speaker of the State Duma, Vyacheslav Volodin, the former First Deputy Chief-of-Staff at the Presidential Administration (PA), will bring the legislative branch even closer to the executive power concentrated in the PA.
  • Protection of relative social and economic stability has been government’s priority in budget policy since the beginning of the current economic crisis. With presidential elections relatively soon (2018), it will be vital for the Russian economy to return to growth, which is felt by the electorate.
    • Despite rhetoric on diversification and privatization, the role of state companies in all areas of the economy is growing and will continue to increase, especially in the framework of import substitution policy;
    • With oil prices low and the budget in deficit, the non-tax financial burden on business is likely to increase.
  • Mobilization of internal unity against external threats: the image of the US as Russia’s existential foe is well established and likely to be exacerbated in political debate, regardless of who wins the US Presidential election. As US-Russia tensions persist, they will feed into calls for greater unity domestically and a call to rally behind the political leadership.

For more details and inquiries, please get in touch with our Government & Public Affairs team.

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