In the highly controlled environment of Russian domestic politics, there are few surprises. Russia is a managed democracy in which political changes and election outcomes are carefully orchestrated by the Kremlin.

Within this context, the surprise announcement that Mikhail Prokhorov, Russia’s third richest man, is taking the reins of liberal political party Right Cause is no surprise at all. Prokhorov’s political debut signals that the Kremlin’s preparations for parliamentary elections, due in December, are already under way.

In the 1990s, Russian oligarchs like Boris Berezovsky and Vladimir Gusinsky commanded vast economic and media empires, giving them political independence and influence. But the era of the oligarchs ended with the jailing of Yukos billionaire Mikhail Khodorkovsky in 2003. Khodorkovsky’s fate sent the clear message that oligarchs who valued their wealth and freedom should stay out of politics.

By adhering to the terms of Putin’s unwritten contract with the oligarchs, Prokhorov made his fortune. A shrewd operator, well versed in the realities of Russian power politics, Prokhorov would not have agreed to lead Right Cause without the sanction of the Kremlin. But since May 2008, when Putin bequeathed the presidency to his protege Dmitry Medvedev, the Kremlin no longer serves a single master.

Medvedev’s succession created two centers of power. Although for most of the past three years Putin and Medvedev have carefully choreographed their dual leadership, recent events suggest the two are no longer in step. In January, Medvedev criticized his mentor for erroneously implying that the perpetrators of the Domodedovo Airport bombing had been identified by the authorities. In March, Putin’s description of coalition air strikes against Libya as “a crusade,” earned a further rebuke from Medvedev. Tensions over air strikes point to wider differences between the two leaders regarding Moscow’s “reset” in relations with Washington. While Medvedev appears convinced that detente with the U.S. is vital to Russia’s modernization, Putin’s pronouncements suggest he is more sceptical.

In light of the cracks that have begun to appear in the Putin-Medvedev tandem, some analysts see Right Cause as a vehicle for Medvedev to retain the presidency beyond the March 2012 presidential election. Adding credence to this view, Prokhorov’s installation as party leader came just days after Putin announced that he was forming a new political movement of his own, the All-Russian Popular Front. One popular theory is that Putin and Medvedev will face off in a pseudo-competition for the presidency that will enhance excitement, improve turnout and give the result an air of legitimacy.

More realistically, the ruling elite will not risk turning a fake competition into a real one by fielding two candidates rather than one. It is too soon to tell whether this single candidate will be Putin, Medvedev or a third as yet undisclosed individual.

This is not to say that there are no real divisions within the elite over the direction of Russia’s political and economic development.

In a report published earlier this month, Agency for Political and Economic Communications Director Dmitry Orlov argues that the decision over who will be president in 2012 will be taken by “the most influential 25-30 Russian politicians and businessmen.”

Despite appearances to the contrary, Russia has long been governed by collective leadership. For the past decade, Putin’s power has resided in his position as arbiter and final adjudicator of the often virulent disputes that have erupted between the various clans that comprise the Kremlin.

But recently elements within the Kremlin have begun to question the future utility of Putin’s vertical power structure. The elite’s willingness to acquiesce to Putin’s dominance has been granted on the condition of his delivering certain economic and political goods. An impressive four percent growth in GDP last year masks the deep structural problems with the Russian economy. Rampant corruption, an increasing deficit, double figure inflation and the continuing dependence on oil and gas exports has led some to conclude that the Putin paradigm has outlived its usefulness. The Russian elite must adapt to survive. Many within the Kremlin have begun to realize that if they continue down the Putin path, capital inflows will evaporate, public protests will escalate and the system on which their power depends will face collapse.

Whether he likes it or not, Medvedev is being cast as the leader of opposition to the status quo. By making modernization, innovation and a war on corruption central themes of his rhetoric, Medvedev has become a magnet for members of the elite who are discontent with Putin. But it is unlikely that the pupil will move against his master. Although Medvedev appeals to the Russian intelligentsia and business class, Putin retains the support of ordinary voters and the powerful military and security services.

While others attempt to style themselves as leaders of opposing camps, Putin and Medvedev remain united. This week, Medvedev said he finds it “hard to imagine” that he and Putin would run against each other for the presidency. Retaining power for the current ruling class and preventing a return to the destabilizing clan wars of the 1990s are priorities for both men.

It will be with these priorities in mind that the configuration of the Russian government beyond 2012 will be decided.

The Kremlin elite will likely wait until the eve of presidential elections to finalize its strategy. Medvedev did not emerge as Putin’s chosen successor until just three months before the 2008 presidential election. Certainly no definitive decision about the presidency will be made until after parliamentary elections in December. The Russian ruling elite are setting up the party political infrastructure to allow various scenarios to play out.

One thing is for certain: the Kremlin elite, and not the voters, will choose Russia’s next president.

Tina Burrett is an assistant professor of international relations at Temple University, Japan. She is author of the book “Television and Presidential Power in Putin’s Russia.”

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