Key political party leaders and State Duma Deputies supported Mr. Medvedev's call for Mr. Putin to become prime minister. "I am for this proposal, of course," said Andrei Vorobiev, Head of United Russia's Central Executive Committee and State Duma Deputy (Russian Business Consulting — 11 December 2007). Pavel Krasheninikov, Chairman of the State Duma to said "We will certainly approve the candidacy of V. Putin…Putin will remain the country’s national leader, which means stability, continuity and progress in the undertakings set into motion in Putin's time" (Kommersant Daily — 11 December 2007).

Earlier reports about President Putin becoming the head of the yet to be formalized Russia-Belarus Union State after he leaves office have added to the speculations swirling around his political future.  The week of 17 December, President Putin travels to Minsk for talks with Belarusian President Lukashenka.  In our view, this option would provide a much narrower policy platform than the role of prime minister, and a less attractive choice for the outgoing President.

Political and economic stability have been key themes underscored by the past week's announcements.  President Putin's support for Mr. Medvedev was welcome news to Russia's financial market.  Both the RTS and MICEX exchanges reported record high volumes.  Foreign and Russian investors and analysts collectively expressed a sigh of relief that President Putin had ended all speculation about his choice to succeed him.

United Russia party leader Boris Gryzlov plans to nominate Mr. Medvedov at the party's convention on 17 December, and he should receive unanimous approval.  All parties must submit their candidates for president before 22 December.

As the United Russia presidential candidate, Mr. Medvedev would be the overwhelming favorite to win the 2 March election.  A Medvedev administration would undoubtedly continue the domestic and foreign policies of Vladimir Putin.  Plus, having the former President in a strong national leadership position would help to ensure that a Medvedev administration would be able to maintain key policy priorities.

Medvedev, who is also chairman of Gazprom's Board of Directors, has stressed the importance of using Russia's economic wealth to address societal problems, such as healthcare, housing and education.  As president, Medvedev would face pressures from various special interests to use the rich Stabilization Fund for various purposes.

Finance Minister Kudrin has maintained a strict discipline on spending priorities of the Stabilization Fund, which is funded by energy revenues.  In 2008, competing demands for funds to fix the country's crumbling public infrastructure, supplement retiree's pensions or to reinvest into capital improvements for the energy sector, among other priorities would need to be politically managed.  Mr. Putin could play an important political counter balance to help a Medvedev administration stay on course.

Russia's booming economy and growing global business interests have increased the urgency to further integrate the country into the international community.  WTO accession has been a priority for the Putin administration, but the accession talks have lagged over disagreements on intellectual property protections, agriculture and other trade issues.  While a WTO accession agreement is thought to be possible in the first half of 2008, a departing Vladimir Putin may need to hand responsibility for this policy objective over to his successor.  Mr. Medvedev would have to take a leadership role to maintain the momentum of the WTO accession process.

Mr. Putin has not indicated when he will share his plans for his political future after his term ends in May 2008 or if his political ambitions include another run to become the president in 2012 or before.  What is clear is that his continued participation in Russia's political decision-making process is assured.  Mr. Putin will continue to be an important factor in Russia's ongoing political stability and economic growth.

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