Gaidar Forum is an event in Moscow each January that gathers together the Russian elite and experts to kick-off the year. It is attended by over a thousand key people from academia, business and politics and has an extensive program varying from digitalization and hospitality to role of the Central Bank, effectiveness of the state control and national technology projects. The event is held on the campus of the organizer RANEPA, the largest university in Europe with over 200.000 students in several locations. Gaidar Forum is the other important event in Russia annually together with the Saint Petersburg Economic Forum, or SPIEF, held in the beginning of June. For East Office both are important events of gathering information as well as an effective place for networking, useful for its shareholder companies.

The main theme of 2020 Gaidar Forum was “Russia and the World, Challenges for the New Decade”. Speaker line-up included but was not limited to Alexey Kudrin, Anatoliy Chubais, Jeffrey Sachs and also Esko Aho, Senior Adviser of East Office.

However, the start of the year and the Forum took an unprecedented and unexpected turn 15.01 with President Putin´s speech to Federal Assembly followed by the resignation of the PM Medvedev and the entire Russian government and surprise nomination the same day of Mikhail Mishustin as Prime Minister. Hometown of the prime minister simultaneously changed as Mishutin is a Moscovite and Medvedev is from Saint Petersburg. As one comment heard in Moscow after the news broke out: “This is a first step of a well-orchestrated plan for power transition come 2024”. Nomination of Mishustin is also copy paste from 2004 when Putin nominated then rather unknown Mikhail Fradkov as Prime Minister.

Different sources also in Moscow say that the change became as a total surprise to Medvedev and his ministers. Putin has kept the change in a very small group. Medvedev becomes the Deputy Head of the Security Council. Time will tell his profile and level of actual position in the future.

What does this Prime Minister change first time in 8 years mean for companies doing business in Russia then? Probably impact is very small for now.

Ruble rate remained relatively stable after the news broke out. Moscow stock exchange remained calm as well. Next step will be the approval by the Duma of the new Prime Minister, followed by nomination of the new government and ministers. From business perspective a lot will depend on the level of change in the government. If many- and several key ministers change, it will also mean bigger changes on lower levels and administrations as well as in other areas in the Russian government and administration. Snowball impact is hence possible and this may have impact to companies on operational level with whom to do business and discuss issues in the future in the government.

Putin´s popularity numbers are lower than when he started his 2nd term. Social improvements were the main topic in his speech and high on the agenda. This focus may be needed for Putin to enable and show actual change to the people that living conditions will improve. As one headline in Russian main paper stated the morning following the speech: “Let´s help them who have it tough”.  Increase of public spending may also mean higher spending by the government which might give new opportunities to companies. 

Business never likes surprises, so swift nomination of the new Prime Minister was received positively. Near future and upcoming nominations will give first indications of direction, but the visibility of the main question of status after 2024 remains still somewhat foggy. Consensus in Moscow at the moment is though rather united: Putin will not continue as the President after 2024, but he plans to remain in power. Proposed changes by President Putin to the Russian constitution also support this view. Latest info is Duma may already in February discuss constitutional changes followed by a possible referendum later in the spring.

First step was taken yesterday.  Lights were on and administration was working overtime till late evening in the White House by Moscow river. To be followed.