"The one thing that is certain is Medvedev doesn't have experience," said Oksana Antonenko, of the International Institute for Strategic Studies in London.
In the Georgia crisis "there is a kind of momentum which can escalate, maybe not to war but to a bigger crisis," she said.
07 May 2008: AFP
MOSCOW • Russia's new President Dmitry Medvedev faces major foreign policy tests and an uphill battle to tame inflation and realise his pet project of strengthening the rule of law, analysts said.
Medvedev's inauguration speech yesterday was designed to be well received by Western governments hoping for a change of tone after the hawkishness of Vladimir Putin.
In it he stressed values that chime well with the Western and particularly US view of how Russia should develop: "economic and civil freedom" and the need for "sincere" respect for the rule of law.
Major world powers will get a closer look at Medvedev when he meets other leaders of the Group of Eight (G8) nations in Japan in July.
But before that he faces a host of problems.
Foremost is his unclear relationship with his mentor Putin, whom he nominated to the prime minister's post after his own inauguration, and a crisis with pro-Western neighbour Georgia over Moscow's support for separatists there.
"The one thing that is certain is Medvedev doesn't have experience," said Oksana Antonenko, of the International Institute for Strategic Studies in London.
In the Georgia crisis "there is a kind of momentum which can escalate, maybe not to war but to a bigger crisis," she said.
Nonetheless Antonenko believes Medvedev may try a less confrontational tone with the West and said the new president, 13 years Putin's junior, looks more in tune with some pro-Western leaders in the former Soviet Union than with autocrats like Uzbek President Islam Karimov or Belarus' Alexander Lukashenko.
Fyodor Lukyanov, editor of the journal Russia in Global Affairs, pointed out the popularity of Putin's foreign policy course with the Russian public and believes it will remain largely the same, even if tensions with Georgia ease somewhat. "Medvedev's slogan is continuity. A politician would be crazy to change a course as popular as Putin's," said Lukyanov.
Moscow-based analyst Boris Kagarlitsky says another problem is uncertainty over the outcome of US presidential elections in November, from which Russia will calibrate its relations with countries from China to the European Union. Russia under Putin has been at loggerheads with the United States on issues ranging from missile defence to NATO enlargement, while being more cooperative in trying to address Iran's controversial nuclear programme.
"The main issue which will determine Russian foreign policy is who is the next American president.... If Washington demands too much they'll go into defensive positions," said Kagarlitsky, who heads the Institute of Globalisation Studies. Meanwhile surging inflation is becoming a growing problem at home, with the latest rise in oil prices, from which Russia derives considerable income, only likely to exacerbate the problem. Russia's central bank has warned the economy is overheating and estimates inflation last year was 11.9 percent.
"Rising prices is the number one concern among the people," said Chris Weafer, an analyst with Moscow-based Uralsib Bank.
"Potential instability can come from higher inflation.... The name of the game is not about bringing it back to the target of 10 percent but preventing it from reaching 20 percent," Weafer said. Close on the heels of inflation are infrastructure needs such as power grid construction and connecting up Siberia's road system that have long been planned but not implemented by the vast and inefficient bureaucracy, said Weafer.
Without these, this vast and unwieldy country is unlikely to be able to diversify away from oil and gas.
