Nov. 27 (Bloomberg) -- Russian Prime Minister Vladimir Putin called for “trust” as he kicked off his bid to return as president next year, accepting his party’s nomination and pledging to continue the economic development begun during his first two terms.
“If the people entrust me with the highest post in the country, I will do everything to ensure we achieve the proper results, Russia develops and gets stronger and life here improves,” Putin said at a United Russia congress in Moscow today.
Putin, 59, was formally anointed as candidate for the election on March 4 at the congress today. Delegates were unanimous in backing the prime minister, said Boris Gryzlov, who heads United Russia’s faction in the State Duma.
The Russian prime minister’s planned comeback to the Kremlin comes as United Russia faces the loss of its two-thirds majority in parliament in Dec. 4 elections according to two opinion polls published on Nov. 25. Neither Putin nor his successor as president, Dmitry Medvedev, has formally joined United Russia, though Putin serves as its chairman.
Today’s congress, which was repeatedly interrupted with chants of “Russia” and “Putin” during the speeches, had some similarities to political events in the Soviet Union, said Julia Tsepliaeva, head of research at BNP Paribas in Moscow. “Twenty years have already passed, and the younger generation doesn’t remember how things used to be, so they don’t have those associations,” Tsepliaeva said.
Renew His Promises
“While this party congress won’t play a major role in the electoral campaign, Putin has used it to renew his promises to voters and mobilize supporters,” said Mikhail Vinogradov, head of the St. Petersburg Politics Foundation research group, by telephone today.
“Russia will without any doubt face a massive challenge on the economic front: deficit risk, the euro zone crisis spillover, banking liquidity issues and most importantly social reforms,” said Sergey Dergachev, who helps manage $8.5 billion of emerging-market bonds at Union Investment Privatfonds in Frankfurt, on Nov. 25 before today’s congress.
Putin was president from 2000 to 2008, a period when the economy grew an average of 7 percent per year. Medvedev, who took over because Putin was constitutionally barred from serving three consecutive terms, agreed in September to swap jobs with Putin next May, taking the premier’s post.
“In the past 10 years we were able to create the necessary foundation for our country’s future,” Putin said. “The hugely important stage of Russia’s revival has been completed.”
Medvedev, speaking before Putin, called his mentor the country’s most popular and experienced politician. Voters should turn out for the parliamentary vote to back United Russia in a show of support for Putin, Medvedev said.
Worsening Russian finances may require the government to make unpopular cuts in social spending and raise the pension age to balance the budget. Alexei Kudrin, who served as finance minister for 11 years under Putin and Medvedev, was fired by Medvedev in September for opposing higher military spending that he said would require higher taxes or other spending cuts.
“There is massive implementation risk and risk for an increase in social tensions,” said Dergachev by e-mail before the congress.
After balancing this year’s budget, Russia will probably run a 2012 deficit of 1.5 percent of gross domestic product, Putin said Nov. 16. Next year’s pension deficit will double to 3 percent of GDP as payroll-tax cuts kick in and the number of retirees jumps by half a million. Russia, which posted budget surpluses in 2000 to 2008, faces deficits of up to 3 percent through 2014 as oil prices fall, Arkady Dvorkovich, Medvedev’s top economic aide, said in June.
United Russia will probably see a 20 percent slide in seats in the 450-member State Duma, the lower chamber of parliament, according to a Nov. 18-21 poll by Levada Center. That would push them to 253 seats, from 315 now, and leave them without the two-thirds majority needed to make changes to the constitution without other parties’ support.
The survey of 1,591 people had a margin of error of 3.4 percentage points.
United Russia is likely to win 262 Duma seats, according to a Nov. 19-20 poll by the All-Russia Center for the Study of Public Opinion, or VTsIOM. The survey of 1,600 people had a margin of error of 3.4 percentage points.
Putin would get 31 percent in the presidential election if held now, according to the same Levada poll, compared with 8 percent for opposition Communist leader Gennady Zyuganov and 7 percent for Medvedev. One-third said they were undecided about whether to vote or whom to support.
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