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Putin Strengthening Power Vertical, Report Says

President Vladimir Putin is building a system of increasingly centralized control, in which he directly manages the government, influential research group Minchenko Consulting said in a report published Wednesday.

The report analyzed the first year of Prime Minister Dmitry Medvedev's government, dividing the Cabinet into Medvedev's team, which includes Justice Minister Alexander Konovalov and Deputy Prime Minister Arkady Dvorkovich, and those who owe their loyalty directly to Putin, such as Deputy Prime Minister Igor Shuvalov and Foreign Minister Sergei Lavrov.

The report concludes that Putin's declared goal of tackling corruption, evidenced in attempts to sideline Akhmed Bilalov, who formerly headed the North Caucasus Resorts project, and the investigation into alleged embezzlement at the Skolkovo innovation center, has severely weakened Medvedev's position.

Both North Caucasus Resorts and Skolkovo are seen to fall within Medvedev's sphere of influence.

But despite these grievances, Medvedev has no reason to be anxious, according to the report, because the weaker he is, the more likely he will suit Putin's system of centralized control.

Given this framework, the most likely scenario is that Russia's development over the next few years will be characterized by sluggish stagnation, the report said, adding that the only way that Russia could be jolted out of its inertia would be if social stability markedly deteriorates.

That could lead someone like Federation Council Speaker Valentina Matviyenko to form a new government or, were the economy to falter, reformist liberals such as former Finance Minister Alexei Kudrin or billionaire politician Mikhail Prokhorov could come to power, the research group said.

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