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Last Updated: Thursday, 28 February 2008, 23:42 GMT
Kremlin holds the reins to big business
By Jon Cronin
Business reporter, BBC News, Moscow

Giant Russian campaign advert showing President Putin (left) with Dmitry Medvedev

Overlooking the Kremlin walls and the gates to Red Square, a huge campaign billboard shows President Vladimir Putin with the man he wants to succeed him as Russia's leader.

As a piece of propaganda, it would not have looked out of place in Soviet Russia.

A relaxed Mr Putin and his political protege, Dmitry Medvedev, are depicted sharing a light-hearted joke.

The message is clear - as Russians prepare to vote this Sunday, 2 March, their current president believes Mr Medvedev is the right man to run the country and its economy.

Political pressure

In many ways, the giant billboard represents the close-knit relationship between the Kremlin and big business in Russia.

As well as being Mr Putin's deputy prime minister, Mr Medvedev is the chairman of Russia's biggest state-run company, Gazprom.

But the way the billboard was put up also suggests something about the relationship between private business and political power in modern Russia.

The Kremlin and Red Square

Shortly after it appeared, reports in Russian media not controlled by the Kremlin suggested that advertising executives had been pressured into replacing adverts from paying customers with campaign billboards for Mr Medvedev.

Some advertisers complained they had been coerced into handing over prime space at heavily discounted rates for fears of reprisals if they did not comply.

Mr Medvedev's campaign team denied any meddling.

Whatever the truth, in the space of a few hours large commercial billboards advertising luxury Western goods had been replaced by a single giant image of Mr Medvedev side-by-side with Mr Putin.

Economic growth

In the years since the fall of the Soviet Union, Russia has embraced its own form of capitalism.

Under Mr Putin, the country has witnessed soaring economic growth, based largely on its huge reserves of gas and oil.

Russia's big businesses are flourishing, and the country boasts a booming stock exchange.

But critics say that stability has come at the expense of genuine democracy and business freedom in the country.

Few Russians see anything other than flattering election coverage of Mr Medvedev on television, with all major TV stations controlled and owned by the Kremlin or Gazprom.

Many private businesses too have faced increasing levels of government interference.

Mikhail Khodorkovsky, once Russia's richest man, is currently serving eight years in a Siberian prison after being convicted of fraud and tax evasion. Critics say it is the result of a political campaign by the Kremlin against him.

Western oil firms, too, have been pushed to hand over many of their assets in Russia to state-run corporations such as Gazprom.

Security links

In one of his first major speeches since his nomination, Mr Medvedev called for an end to Kremlin interference in Russian boardrooms.

Gazprom's chief executive, left, with President Putin
Ear of the president - Mr Putin (R) takes a keen interest in Gazprom

Russian businesses, he said, needed more economic freedom.

Many hope that Mr Medvedev will be true to his word, if, as expected, he replaces Mr Putin as president following elections on Sunday.

But several key Russian businesses remain intertwined with the Kremlin.

Mr Medvedev has no background with the country's intelligence services, but many of the men at the top of Russian business have close links with both the government and the Federal Security Service (FSB), the organisation that replaced the KGB.

Sergei Ivanov, Russia's first deputy prime minister and a former FSB director, currently heads the United Aircraft Corporation, the recently forged conglomerate tasked with reviving the country's military and commercial aviation industry.

Igor Sechin, the Kremlin deputy chief of staff, who is also thought to have close links with the security service, is currently the chairman of Russia's state-run oil giant, Rosneft.

And of course Mr Putin himself famously served as a KGB officer in Germany during the Cold War.

Mr Medvedev's pledge to encourage more economic freedom will be welcomed by many in Russia.

But the country's well-connected business and political elite is unlikely to see any change in its influence as long as the Kremlin strives to hold the reins of big business in Russia.


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