Monday, October 25, 2010

Russia is cleaning up - president steps up against Putin

There is change happening in Russia. President Dmitry Medvedev who became the president in 2008 with his old mentor Vladimir Putin still lingering around, being the true leader, has asserted his independence when giving the Mayor of Moscow Yuri Luzhkov – and a culture of corruption - the boot.
An opinionated journalist wrote in the Moscow Times: "For the past decade Russia has been producing massive corruption, successfully turning top government officials and well-connected entrepreneurs into Forbes A-list billionaires. The political system was tightly and rigidly interlinked with this officially sanctioned sleaze. If such an important, huge link in the corrupt chain as the city of Moscow is tinkered with, the entire state edifice might come tumbling down."

But now he is gone, and the Deep Purple loving president Medvedev is getting support from Putin´s old allies and Medvedev is showing his muscles, making the presidential election 2012 less predictable. The president does not seem willing to make space for Putin or be a puppet for him if he chooses to retire. Bad news for the old president! Probably good news for the world.
With Medvedev in power – and without Putin peeking over his shoulder – we can expect a new kind of Russia. The younger president talks about institutions, infrastructure, innovation and investment and about becoming a member of the World Trade Organization.
Still, Russia is supporting regimes like Venezuela and Iran, hence men like Hugo Chavez and Mahmoud Ahmadinejad, but the latest contracts on nuclear power stations were signed by Putin and not Medvedev. Subtle difference, but still...
Should FMCG brands in Australia or Sweden bother about this power struggle at all? What has this have to do with consumer trends and insights? Well. Russia was seen as up and coming – part of the BRIC countries – a few years ago, but today all light is on China and the corruption has been a repellent for businesses in Russia.
I believe things can happen fast if Medvedev plays his cards well. This has been going on for a while, and when the scale tips, it tips... 142 million Russians can make an impact and be a lucrative market for brands (even if 1,354,370,754 Chinese definitely is a larger number of consumers)...
Get ready for change within the next year though.

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