Bloomberg News

Putin Aims to Dodge Kremlin Runoff as Stability Loses Appeal

February 03, 2012

(Updates with close of stock trading in fifth paragraph.)

Feb. 2 (Bloomberg) -- Prime Minister Vladimir Putin is battling to avoid a presidential runoff that may dent his authority as polls suggest Russians will force a second round of voting for the first time since 1996.

Putin, 59, warned yesterday that a runoff may challenge the stability he’s championed throughout his 12 years as the country’s top politician, telling students who have volunteered to monitor March’s vote that he’s ready to fight should he fail to win the 50 percent backing needed for a first-round victory.

The Russian leader is facing the biggest challenge to his rule after allegations of fraud in Dec. 4 legislative polls sparked mass protests. While Putin has targeted his core electorate in campaigning this year, his authority may be diminished because he’s losing touch with younger voters who don’t remember the instability of the 1990s, according to Nikolai Petrov, a political analyst at the Carnegie Center.

“A second round is bad for Putin because he should show the elite he’s not just a strongman but also Russia’s undisputed leader,” Petrov said yesterday by phone from Moscow. “He’s already weaker than he was and he won’t be as strong a president as he once was.”

Fitch Ratings lowered the outlook on Russia’s BBB credit rating to stable from positive on Jan. 16, highlighting “risks associated with Russia’s political model.” Russian stocks rose for a third session to reach a five-month high, with the Micex index gaining 0.2 percent to 1,542.39 at the close in Moscow.

Support Dwindles

Having vowed to bolster the rule of law since taking over from his predecessor Boris Yeltsin on Dec. 31, 1999, Putin made his ability to deliver stability a cornerstone of his campaign.

Next month’s election going to a second round may bring “a certain destabilization, a continuation of the political battle,” he said yesterday in Moscow. “I’m ready for this.”

Putin, who wants to replace President Dmitry Medvedev in the Kremlin after four years as premier, will get 49 percent of the vote, according to a Jan. 21-22 poll of 1,600 people by the state-run All-Russian Center for the Study of Public Opinion, known as VTsIOM. That’s down from 52 percent a week earlier.

A Jan. 21-22 survey of 3,000 people by the Public Opinion Foundation, known as FOM, puts that figure at 44 percent, down from 45 percent the previous week. The prime minister’s support is as low as 37 percent, according to a poll by the independent Levada Center, which surveyed 1,600 people on Jan. 20-23 and had a margin of error of 3.4 percentage points.

Fraud Accusations

Communist leader Gennady Zyuganov, Putin’s closest rival, would get 8 percent according to Levada and 11 percent according to VTsIOM and FOM, leading candidates such as billionaire Mikhail Prokhorov and former Putin ally Sergei Mironov.

Zyuganov and other opposition leaders have accused Putin’s ruling United Russia party of inflating its score to about 50 percent from 30 percent in December’s elections. They demand a fresh vote and plan another major demonstration in Moscow on Feb. 4. Previous rallies attracted tens of thousands of people.

The prime minister says the legislative polls were fair. Still, he began installing cameras at polling stations to boost transparency at March’s vote, while Medvedev has proposed restoring direct elections for regional governors, which were scrapped in 2004, and easing the registration of political parties and presidential candidates.

The Central Electoral Commission has barred Grigory Yavlinsky, who heads the pro-democracy Yabloko party, from challenging Putin next month, saying signatures gathered to support his application were invalid.

‘Matter of Urgency’

Russian electoral authorities should reverse the decision and allow Yavlinsky to run in the election as “a matter of urgency,” Catherine Ashton, the European Union’s foreign policy chief, said yesterday in a speech in Brussels.

As the election draws nearer, Putin has stepped up the anti-U.S. rhetoric that became a hallmark of his two terms as president and helped stoke a popularity rating that reached 70 percent in 2008, when he made way for Medvedev.

“Sometimes I get the impression the U.S. doesn’t need allies, it needs vassals,” Putin said Jan. 25 in the Siberian city of Tomsk.

The prime minister has every chance of winning without a runoff, Dmitry Peskov, his spokesman, said Jan. 17.

Billionaire Dmitry Pumpyansky, majority owner of pipe producer OAO TMK, said Jan. 26 that a clear-cut first-round victory for Putin is preferable for big business.

‘Don’t Need It’

“I think there will be just one round and Putin will win,” Pumpyansky said in an interview at the World Economic Forum in Davos. “I would like that because in the current conditions in Russia any changes can be made through reform from above, while other changes from the bottom, frankly speaking, lead to a revolution and we don’t need it.”

While Putin is assured of victory, his promises of stability have lost their “magical significance” and should be combined with new ideas, said Valery Fedorov, VTSiOM’s general director.

“The question is: will he win by carrot or stick,” Fedorov said yesterday by phone. “He needs to win by carrot and avoid accusations of fraud. He can’t afford that kind of impaired victory.”

--With assistance from Andrew Langley in London and Henry Meyer and Lyubov Pronina in Moscow. Editors: Andrew Langley, Balazs Penz, Alan Crosby

To contact the reporter on this story: Ilya Arkhipov in Moscow at iarkhipov@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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