Late on Sunday evening (4 March), Putin addressed a crowd of -according to official figure – more than 100,000 who had gathered to cheer his victory. He will be inaugurated on 7 May, with the new prime minister set to take power by 28 May.
The other candidates, Gennadiy Zyuganov, Mikhail Prokhorov and Sergey Mironov accepted the election results though Vladimir Zhirinovsky and the opposition did not.
The first three have confirmed that they conceded victory to Putin. Zyuganov, the Communist Party leader, stated that he could not call this election fair and that a number of fraudulent actions took place. The so-called non-systemic opposition claims that the nature of manipulation has changed relative to the December parliamentary election.
It alleges that while the December election was falsified outright, the presidential poll was rigged by the authorities bussing Putin’s supporters to vote at multiple ballot stations.
We remind you that an opposition protest will be held on Pushkinskaya Square today (5 March) starting at 19:00.
The market will likely take comfort from the win as a sign of continuing stability, but will now focus on whether Putin will deliver on his economic and political promises. The market is now assigning a smaller political risk premium to Russia relative to the aftermath of the parliamentary election, although the strength and breadth of the market’s reaction will depend, crucially, on whether Putin addresses the key grievances of foreign investors, including corruption, the treatment of minority shareholders and independence of the judiciary.
In our view, simple political and economic incentives will drive Putin to be more reform-oriented than generally expected. Those that underestimate Putin’s ability to transform himself into a modest reformer in order to maintain his clout and popularity may be in for a rough surprise.
The great macroeconomic transition from twin surpluses to twin deficits (current account and fiscal) and Putin’s desire to retain power may provide powerful incentives to deliver. The new political constraint added by the opposition will also serve as a useful corrective to reform inertia.
