May 7 (Bloomberg) -- Dmitry Medvedev will take the reins of Russia's presidency from Vladimir Putin today with promises to fight corruption and inflation in partnership with a predecessor who may try to overshadow him.
As Medvedev takes the oath of office before 2,500 Kremlin guests, Putin will become the first post-Soviet president to serve out his term.
Medvedev, a 42-year-old St. Petersburg lawyer, will assume control of the world's largest country in its 10th year of energy-fueled economic growth. With Putin heading the ruling United Russia party and planning to become prime minister, Medvedev faces a possible clash over who runs Russia.
``There's still some uncertainty about how Putin and Medvedev will work together,'' said Kim Iskyan, a fund manager at Diamond Age Capital Advisors in Moscow, by telephone yesterday. ``Russia is still perceived as one of the riskier places to invest in. It's still considered fairly corrupt, and less transparent than some other emerging markets.''
The constitution requires government ministers to resign immediately after the inauguration, clearing the way for Medvedev to confirm Putin's choices for a new cabinet. The State Duma, or lower house of parliament, meets tomorrow to endorse Putin's nomination to his new post.
Kremlin spokesman Dmitry Peskov declined to comment on a May 5 Gazeta newspaper report that Putin plans to push a constitutional amendment to increase his influence.
Increasing Ministers
Gazeta reported that Putin will more than double the number of deputy prime ministers and shift control of the Foreign Ministry, Defense Ministry and security services from the Kremlin to the prime minister's office.
``Before any such decisions are officially made, these reports are rumors, and we don't comment on rumors,'' Peskov said.
Medvedev served as first deputy prime minister under Putin since 2005 and has yet to give up the post of chairman of OAO Gazprom SA, Russia's natural-gas export monopoly. Putin has been president for two four-year terms, after succeeding Russia's first post-Soviet president, Boris Yeltsin, who resigned on Dec. 31, 1999.
The United Russia party, which Putin created, has little in the way of ideology beyond backing Putin and making sure the country remains a global power. It's designed to keep the same elite in control for decades, much like Soviet Union's Communist Party and Mexico's Institutional Revolutionary Party.
`Neo-Authoritarian'
``We are now moving into phase two of the neo- authoritarian project in Russia,'' said Robin Shepherd, senior fellow at Chatham House, a London research organization. ``It is quite possible that United Russia will emerge as the key medium through which Putin and his clique acquire an enduring stranglehold over the Russian political system.''
Russia, the world's biggest energy exporter, has benefited from record oil and gas prices, with the economy growing at an average 7 percent a year in the past decade. That growth has pushed up wages, the ruble and inflation, making Russia less competitive. Medvedev has vowed to curb inflation, without detailing how.
On corruption, Medvedev has said Russia's problem pervades government on ``an enormous scale.''
Most Corrupt Countries
Berlin-based watchdog Transparency International last year said businesspeople and analysts perceive Russia as being among the most corrupt countries of 180 it studied, with a ranking of 143. In November 2006, Deputy Prosecutor-General Alexander Buksman estimated that corrupt Russian officials take about $240 billion in bribes a year.
The 40-minute inauguration ceremony will start about 11:40 a.m. with Putin reviewing the Presidential Guard in the Kremlin's Cathedral Square. Before Medvedev takes the oath, a military escort will bring the Russian flag and the presidential flag, as well as a copy of the constitution and the presidential seal, to the podium in the Great Kremlin Palace, where the inauguration will take place.
Duma speaker Boris Gryzlov will be at the podium when Medvedev is sworn in, as will Sergei Mironov, speaker of the upper house, the Federation Council. Valery Zorkin, chairman of Russia's Constitutional Court, will administer the oath of office after Putin makes a short speech and hands the presidential seal to Medvedev.
The ceremony will close with Medvedev reviewing the guard in his first act as Russia's third president.
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