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Dmitry Medvedev will deliver his first state-of-the-nation address since being elected as president on Wednesday. The event was moved to the fall to give the new leader time to develop his policy agenda.
Medvedev was elected on a promise to stay the course and implement what was then called "Putin's Plan." That was in March, when things were going well and oil was over $100 a barrel. It was natural that Russians, with their incomes steadily rising and cheap car loans and mortgages available, desired nothing but more of the same.
Medvedev promised exactly that together with a strong push to modernize everything from the dilapidated transportation infrastructure to substandard health care. He also talked about stimulating innovation to wean Russia from its dependence on oil.
Then a lot of bad things happened to test Medvedev's leadership. Georgia's invasion of South Ossetia confronted Medvedev with the need to send troops into battle to fight a former Soviet state -- a decision that his predecessor never had to make.
Medvedev demonstrated his ability to make tough choices and stay true to high principles. He emerged from the crisis as a leader whose word counts for something.
Then in September, the global financial tornado put Medvedev's modernization agenda into jeopardy. Instead of implementing his reforms, he is now dealing with bank failures, attacks on the ruble, and foreign margin calls on major Russian companies about to default on their loans.
A rosy growth outlook for the economy has been replaced with predictions of a hard landing and even a recession. People accustomed to growing incomes are facing lay-offs and frozen wages.
Russia is seeing a collapse in global demand for its primary exports and the prospect of a prolonged deflation in the United States and Europe further depressing its export earnings. At home, a consumer credit-driven shopping spree is grinding to a halt, and businesses are cutting back on investment programs, unable to tap international and domestic financial markets.
This is not the agenda that Medvedev was elected to implement but a reality he has to deal with. His recent focus on reforming the international financial system and security institutions in Europe is a distraction from what the country needs right now. Medvedev needs to demonstrate in his speech that he has a plan to deal with the crisis. We are living in a new world, and staying the course is no longer good policy. "Putin's Plan" needs a major upgrade. It's time to roll out "Medvedev's Plan."
Vladimir Frolov is president of LEFF Group, a government relations and PR company.
