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However, all this had to do not only with people but with rules both formal and informal, which is of particular importance in this region where opposition is not limited to staging picketing and meetings. From this point of view, democratization of the region is important at least at the municipal level, so that certain order could be imposed on the struggle of the various existing pressure groups, and minorities could have their rights guaranteed. From this point of view, by the way, the recent cancellation of Derbent mayor election returns offers a promise of some hope.

Interestingly, the appointment of A. Khloponin by D. Medvedev was sharply criticized by Chechnyas head R. Kadyrov: To unite all the regions of the Caucasus, to bring them all to the same model I dont believe that this could be a very successful solution. If there exist intermediaries between the government of the Russian Federation and the presidents of the republics this is already a sign of weakness. I think that if I am a president, and if I am trusted, then I must report directly to the government of the state. And the President of Russia must have possibilities for studying various issues and for assigning appropriate tasks to the government and to the Ministers. Previously it was Kadyrov himself, who is proclaiming terrorist methods in dealing with his opponents and who is accused of grave crimes, that was considered to be one of the candidates for the post now occupied by Khloponin.

January saw the retirement of two political diehards Tatarstans head M. Shaimiev (who has been staying in republics government since 1991 and two months before the expiry of his term in office voluntarily retired) and Head of the Administration of Volgograd Oblast N. Maksiuta (who was first elected the Oblasts Governor in 1996, and whose term in office expired in December 2009). For the post of Head of the Republic of Tatarstan, the RF President is going to recommend one of M. Shaimievs cronies Head of the Republics government R. Minnikhanov, while First Deputy-Head of the Administration of Volgograd Oblast A. Brovko was appointed to N.

Maksiutas former post. In this connection, of the greatest importance is the precedent with M.

Shaimiev who used to head a big and wealthy region. In the early 1990s the region was famous for its strong separatist feelings which were later suppressed, the price being the creation in that region of a specific political regime where the core official posts and economic assets were divided between a few powerful families. This regime, which had been shaped in the main by the mid1990s, continued its existence even after the abolition of elections of regions heads. It looks as if Shaimievs departure will prove very soon - that there are no indispensable officials in the regions, and in this respect it serves as a good precedent.

In this connection, it is noteworthy that at the same time there once again emerged the discussion concerning changes in the administrative boundaries of the regions. Chairman of the State Duma - United Russias leader B. Gryzlov - declared that ...Subject of the Federation is a lofty name. A Subject of the Federation must indeed be compatible with that name. In my opinion, there should be no self-sufficient RF subjects... Either the approach to work in such a RF subject must be altered, or it must be merged with another subject so that this territory could become selfsufficient. There is land, mineral natural resources, working hands. I do not see why a subject cannot be self-sufficient in such a situation. It should be remembered, by the way, that all the republics in the North Caucasus are not self-sufficient. It seems that actually it is not changes of their borders that are being discussed this discussion is just a way to remind their heads of their dependent status.

In January, the situation around the Ministry of Internal Affairs of Russia (RF MIA) became much more dramatic. In December, RF Presidents edict on reforming the RF MIA was issued, followed by some changes in personnel and by some obligations being assumed by the Ministrys CEOs, who declared their readiness for reform. This particular government agency has become, in effect, one of them main threats to human rights and private property in this country. In January Minister R. Nurgaliev stated that he had signed Order No 25 On the issues relating to the assessment of the operation of RF agencies of internal affairs, whereby new criteria for RUSSIAN ECONOMY: TRENDS AND PERSPECTIVES assessing the militias activity were introduced, which abolish the notorious system based on discipline of the rod1. According to the Minister, now the operation of the agencies of internal affairs will be carried on with due regard for public opinion and for societys response for a revealed or solved crime, and independent sources will be involved in data collection. However, it soon became clear that the Order offered no specific definitions related to the issues in questions (e.g., of public opinion, independent sources, etc.). Moreover, Order No 25, as it was found out, largely reestablished the principles of the existing practice, and the militia, as before, is required to increase its quantitative indices. At the same time, the situation in the Ministry itself remains difficult; it is impossible to prevent even the gravest crimes which the authorities have avowed to eradicate murders of ordinary citizens by militiamen. This time, the brutal murder of a journalist allegedly committed by an on-duty police officer, who was then arrested and charged with aggravated assault, led to the dismissal of the Director of the Administration of Internal Affairs of Tomsk Oblast.

Simultaneously the RF MIAs CEOs demonstrate their aggressive attitude to the members of their staff who dare to come forth with criticism. In January, former police officer A. Dymuvsky was attested in Novorossiisk. A few months earlier he had posted to the Internet a video footage of his well-substantiated speech addressing the unsatisfactory state of affairs with the militia [police]. Dymuvsky was charged with fraud and abuse of office the authorities alleged that he had appropriated a sum of 27 thousand rubles allocated for special purposes. The criminal proceeding against him had been initiated immediately after the video was released, but initially he had remained free on his own recognizance not to leave. This demonstrative punishment, in addition to many other things, is a proof of the fact that it is now still too early to be soothed by a few correct declarations of the first persons in the government.

On 22 January, a general meeting of the State Council an advisory body under RF President took place at the Kremlin, which was attended by both President D. Medvedev and Prime Minister V. Putin. At this meeting, a variety of declarations were made, mainly in order to avoid any significant alterations. On the one hand, D. Medvedev voiced a number of important statements such as the political system needs to become smarter, more flexible, more modern, there were some appeals to the governors (who, incidentally, had been appointed by those same Medvedev and Putin) that they should negotiate with the opposition and to take its opinions into consideration; however, neither Medvedev nor Putin set such goals before themselves. On the other hand, V. Putin warned against the Ukrainization of Russian political life, which can be understood primarily as a call against fair elections. It was exactly by that moment that the first round of a new presidential election was completed in Ukraine, in the course of which the current head of the state could not even pass on to the second round; besides, the electoral campaign was conducted in competitive conditions not only in terms of ensuring registration of all the candidates but also of adequate presentation of relevant information by TV channels; and there were no serious concerns about the fairness of vote count.

The practical outcome of the State Councils meeting was that the RF Central Electoral Committee submitted to the RF Presidents Executive Office a proposal concerning the abolition of early voting during the elections of all levels, which is one of the frequently applied methods of falsifying the results of elections due to the impossibility to trace a bulletin after a voter has voted early. This idea is worthy of approval, but it has little practical importance in a situation when the oppositions candidates are usually barred from standing in elections (and so have no opportunities for appointing their own observers), while the Russian courts of justice have legitimized the practice of rewriting the ballot election protocols by higher - level commissions without any control by any observers under the pretext of recalculation of bulletins, these final versions of the protocols being very different from the copies issued to the observers. Thus, just as they did it before in the Presidential Message, the authorities are forced to admit the falsifications committed during elections, but they present these as some singular, untypical 1 A system for appraising the activity of the Ministry of Internal Affairs personnel, which requires continual growth of the indices of the numbers of persons brought to criminal and administrative responsibility and the incidence of solved crimes, have many times been an object of criticism for being prone for falsifications and for the militia personnel being forced to commit such falsifications.

THE POLITICAL AND ECONOMICAL RESULTS OF JANUARY cases be it the example of just one city in Dagestan (Derbent), or the example of one and by no means the most widely applied technique of early voting1.

In January, the State Duma ratified Protocol No 14 to the European Convention on Human Rights and Fundamental Freedoms. Russia was the last country that had not yet ratified that document. It envisages reform of the European Court of Human Rights and makes it possible to simplify the decision-making procedure and thus speed up its work (at present, the period of waiting for and considering a case by the ECHR is from 6 years). This protocol was approved as early as 2006, but its ratification by Russia was at first delayed, and then it began to be seriously doubted. As a result, Russia agreed that the number of the ECHRs courts from different countries should be strictly regulated, and could not be increased on an arbitrary basis. Informally, the consideration of the notorious case Yukos versus Russia is delayed for an indefinite period (but remains accepted for consideration). Within the framework of that case, a group of Yukoss former managers accuse the Russian Federation, represented by the heads of this countrys executive authority, in deliberately inflicting financial losses on that company and depriving its employees of their freedom. The recognition, last year, of that suit as eligible for consideration by the ECHR was unpleasant news for the Russian authorities.

Some substantial replacements took place in the top leadership of the Russian armed forces.

The following officers were transferred to the reserve: Commander-in-Chief of the RF Ground Forces V. Boldyrev (to his post was appointed former Commander of the Siberian Military District A. Postnikov); and Commander of the North Caucasian Military District S. Makarov (to his post was appointed Head of Staff of the same Siberian Military District A. Galkin). The logic of these appointments is absolutely clear the Russian General Staff is headed by N. Makarov under whom both the newly appointed officers had served in of the Siberian Military District. However, in terms of common sense it is rather difficult to find an explanation for these new appointments to the key posts in the armed forces, and not in the least because during last years war with Georgia the ground forces in general and the forces of the North Caucasian Military District in particular earned some high praise which was quite justified from military point of view.

In January, Minister of Finance A. Kudrin published some important estimates of the state of the Russian budget. First, if oil prices remain at the level of about $ 70 per barrel, Russia will have to resort to foreign borrowing for yet another 5 years, and the state budget will be drawn with a deficit. Mr. Kudrin noted that this is not a tragedy, because Russias government debt, by the international criteria, is small 8.2 % of GDP.

While one cannot essentially disagree with the non-tragic estimates offered by A. Kudrin, still one alarming fact should be noted that the Russian authorities once again have effectively confirmed their intention to wait for a new rise in prices for hydrocarbons but not to cut down budget expenditure.

In January, there also took place the IPO of Russian Aluminum one of Russias biggest companies. Last year the company similarly to its principal shareholder O. Deripaskas business became effectively bankrupt, and so received an active support from the State. State banks allocated some substantial sums to the restructuring of its debts. The IPO was designed to demonstrate an improvement of the companys financial indices and the reestablished trust of its creditors. However, another fact became obvious: out of the $ 2.4 billion received for 11 % of its shares, a quarter came from the Russian State corporation Vneshekonombank; besides, shares were bought by Sberbank of Russia and VTB, was well as Libyas sovereign fund. The company acquired no significant investors even such as the sovereign funds of China, Singapore or the Persian Gulf countries. In fact, it was found out that Russian Aluminum, as before, existed thanks to government support, its controlling shareholders in contrast to the common practice of developed countries remaining the same.

1 This technique is not particularly widespread among other things, because it requires some considerable efforts on the part of the authorities. They must first ensure that a sufficient number of people personally turned up at the polls in order to participate in an early voting. In the presently existing conditions, it is much easier to make alterations to a final protocol once it is submitted to a superior-level commission.

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