The morning of the 10th September began with a sensation on the Russian Internet. At around 10 a.m., the popular democratic net publication http://www.gazeta.ru/, which often makes harsh criticism of the Kremlin and provides space for commentary to the most radical opposition members, posted an article by Dmitry Medvedev entitled "Forward, Russia!"

No one in the journalist world seemed to have had any warning that Medvedev would be gripped with a "sudden passion" to write. There was no mention in the morning papers that the article was going to come out. But several Internet publications immediately reacted, and also posted the article on their sites. Its appearance was picked up soon afterwards by the democratic radio station "Ekho Moskvy".

The most surprising thing was that Medvedev's article was only posted on the official presidential site http://www.kremlin.ru/ at midday. All this combined to make it look as if the appearance of the text on the Internet was spontaneous, which gave an aura of sincerity to Medvedev's address to Russian citizens.

But what was behind all this? What did the text actually contain?

As I am finishing a book about the history of Russian reforms since the time of Mikhail Gorbachev (since the mid-1980s) at the moment, it all felt very familiar.  It was as if I'd suddenly gone back a quarter of a century, to the time of my youth, of naïve hopes, empty shops and the rusting iron curtain.

I don't know whether the similarities are obvious to young Russians, who don't remember the events of 1985 very clearly, or to my contemporaries, for whom the events are not fresh in their minds. But it seemed to me that Medvedev's text might almost have been written at the time of Gorbachev's perestroika.

I should remind you that it was then that the leader of the Soviet Communists Mikhail Gorbachev began tentatively to undermine the system that had existed since Lenin's day, and remove conservatives from the political leadership of the USSR. In 1985, it seemed that he was only trying to improve the effectiveness of the Soviet system, while with every year changes took place which turned this system into its opposite - into a society with elements of a market and democracy.

But let us return to Medvedev. The first important point his article makes is to admit that mistakes have been made. This is a cautious affirmation, one that does not undermine the foundations of the system. Medvedev points out the problems that have been revealed by the crisis, the "drop in production that is greater that in other economies (my italics - DT) during the present crisis. The excessive fluctuations of the stock exchange. All this proves," the Russian president concludes, "that we certainly did not do everything that was necessary in previous years. And we certainly did not do everything correctly."

Many Russian readers probably did not realize that in saying this he was taking issue directly with Prime Minister Vladimir Putin, and with the report of the Russian government on results of activity for 2009. Putin, who presented the report at the Duma on the 6^th of April, declared: "A severe slump is being experienced by practically all industries of the world economy. In some places, things are better, in some they are worse, but on the whole the situation in the Russian economy is fundamentally no different (my italics - DT) from world tendencies".

In Russia, official Kremlin propagandists constantly emphasize the fact that Medvedev is Putin's successor to the position of president, that he is his younger comrade, and that there can be no disagreements between the two leaders. However, Medvedev's article demolished this notion. And significantly, this is taking happening thanks to an initiative taken by the president himself, and not during a press conference or interview, when things might get said in the heat of the moment which shouldn't have been.

Medvedev is not setting out to confront Putin directly. But at the start of perestroika Gorbachev did not directly oppose his predecessors, either. He was giving the Soviet intellectuals, who were used to picking up on Aesopian allusions, the chance to fill in the blanks for themselves.

Medvedev not only discussed the economy in his article, but also political problems. He noted that "democratic institutions have on the whole been formed and stabilized, but their quality is very far from ideal". This also looks like an attack on Putin, who - even if ironically - in one interview called himself such an absolute and pure democrat that since the death of Mahatma Gandhi he did not even have anyone to talk to.

Medvedev's assessment of the state of Russian democracy is very similar to the early theses of Gorbachev, who showed his confidence in the correctness of the socialist democracy, but proposed to strengthen it. In the spirit of Lenin, so to speak.

Medvedev is essentially saying directly that in future, Russia must move to a parliamentary democracy, where the "leaders in the political struggle will be parliamentary parties which regularly replace each other in power". He is practically repeating the theses of the democratic opposition. But where this is something that  the opposition wants to happen today, for Medvedev it is a task for the future. For the moment, according to the president, we must be satisfied with the fact that "political parties have received fresh opportunities to influence the formation of executive power in federation regions and municipalities".

We should remember that under Gorbachev, democratization also began in 1988-89 with the construction of a very unusual system, in which elections were not actually equal, secret and direct, as is customary in modern democracies. That is to say, Gorbachev was prepared to experiment with democratization, but he was afraid to start building a real democracy right now.

It is characteristic that Medvedev is categorical about one thing: we cannot return to the "democratic 1990s". In this, he agrees with Putin, who in recent years has said again and again that in the 1990s capitalism established itself in the country under the guise of democracy, serving its own selfish interests, and also those of its foreign (primarily American) sponsors. Medvedev does not dare to make a drastic break with his older comrade.

In Gorbachev's early years, he too rejected a return to capitalist democracy. The feeling was: why should we move backwards? We will do everything better than under capitalism, we will build socialism with a human face.

Another feature very characteristic of Medvedev is the way he declares a new way of thinking in international relations. He talks of the need for rapprochement with western democracies, something that Putin has not discussed seriously for many years. Medvedev also stresses that "petulance, arrogance, insecurity, mistrust and especially hostility must be eliminated from Russia's relations with leading democratic countries".

As Vladimir Putin has essentially been responsible for creating the parameters of Russian foreign policy since 2000, and foreign ministers have simply been the obedient followers of his policy, words about petulance and arrogance can only apply to Putin. And indeed, some Russian analysts have noted that Putin's behaviour betrays the marks of his difficult childhood, and his unwillingness to forgive insults by other boys, a subject I have written about in detail for openDemocracy.

Another view of Medvedev's: "We must be able to interest partners, and involve them in joint activity. And if we need to change something in ourselves, get rid of prejudices and illusions, in order to be able to do so, and then we must do so." In the mid-1980s, the idea of the need to change something in ourselves was first expressed not by Gorbachev, but by Boris Yeltsin in his speech in the 27^th Communist party congress.  This was very much in the spirit of Gorbachev's perestroika.

Now let us try to compare the specific picture of the changes which Medvedev is now announcing with the changes Gorbachev was announcing a quarter of a century ago.

Right at the start of perestroika in the USSR, the issue of combating drunkenness came up. Quite recently, it came up once again, and Medvedev gives it pride of place in his article. Under Gorbachev, the war on drunkenness was virtually the only large-scale campaign of his first two years in power.

But there is also another important similarity between Medvedev's approach and that adopted under perestroika. People do not remember that well today that along with the anti-alcohol campaign, the head of the Soviet government Nikolai Ryzhkov did his best to speed up socio-economic development. And the way being proposed was by developing machine-building, i.e. through technology alone. It was only in June 1987 that the issue of changing the economic system was raised. Before that what we mainly heard about was the wonderful breakthroughs that would be achieved by advanced technology combined with sober workers.

And now Medvedev has outlined the five strategic vectors of economic modernization. Typically, he says nothing about the issues that are being discussed by economists. Medvedev, as a new-wave technocrat, simply paints a picture of a bright future where Russia will become a leading country in all key spheres of high technology: new types of fuel, nuclear technology, information technology, advanced satellites, and breakthrough in creating medical equipment. But how are we going to achieve all this, given the raw materials focus of the country, and our dependence on world oil prices, which I have written about in detail in another of my articles? Medvedev does not offer us any insightful discussion about this.

As we may recall, in the 1980s Gorbachev meant to raise Russian automobile construction to a world level by developing the Volga automobile factory (VAZ), without any foreign investments and equipment. To this day, VAZ produces very poor cars that are inferior to western models. Medvedev also forgets about the poor quality of the automobile industry, and immediately talks about more advanced technology.

And in conclusion. How did Soviet citizens see the structure of society during the time of perestroika? On the one hand, there were supporters of perestroika, and on the other there were opponents. This naïve approach pitted good against evil on different sides of the barricades. All the officials and appratchiks were declared to be opponents of perestroika, and the entire people headed by Gorbachev were declared to be supporters.

What does Medvedev write? "People will try to interfere with our work. Influential groups of corrupt officials and "entrepreneurs" who do not engage in any actual enterprise." Once more, we can see an attempt by the political leader to identify himself with the people, and marginalize his opponents.

Even yesterday it was perhaps still hard to imagine to what extent Medvedev would strive to copy Gorbachev's path. He was afraid to oppose Putin, and only took symbolic steps to consolidate his popularity in intellectual circles - a subject I have also written about for openDemocracy.

But today Medvedev's intentions are clear. There is, however, one important differrence between the positions of the two men. Gorbachev was put forward by the Soviet leader Yury Andropov, who was the head of the KGB for a long time.  Gorbachev only became the leader when Andropov died. There was nothing to stop him from breaking with the policy of his dead predecessor. But Medvedev rules Russia in tandem with Putin. How can policy be changed in this situation?

Almost every week since the beginning of spring I have been going to our dacha.

I take the metro, the suburban train, the bus and then walk for 10 minutes. It takes me just as long to get back.

In the spring Dmitri Gaev, the head of the Moscow metro, said that 400,000 fewer people are now using the metro every day because of the crisis. 400,000! But I've asked around and no one thinks the metro is less crowded.  I don't think so either.  At 6 p.m. last Friday at Komsomolskaya metro station, I was surrounded by a crowd of sweaty, wild, hurrying, tipsy, half-naked, noisy people with rucksacks on their backs. These were not people who had been put off taking the metro by the crisis.

I'm always interested to know how the dry statistics in economic reports relate to real life. In Estonia, for example, GDP fell by more than 15% in the first quarter of this year. And what happened? Did cafes and bars close down? Did prices rise? Were there fewer tourists? I was in Tartu at the end of April and didn't notice anything of the kind.

As I was setting off for the dacha, I wondered what effect the economic crisis has had on life in the suburbs. Russian Railways assert that passenger flows in the first months of 2009 dropped by 20-30%, but this is not obvious in the overcrowded suburban train.  What I have noticed is that for the first time I can remember ticket inspectors have appeared in trains from Moscow to Golutvin.   When I was a child my friends and I would go to Zolotovo to swim in the gorges and I do remember that there would occasionally be some obscure, unshaven guys who wandered up and down the aisles of the train, but no one ever fined us. Later on, even these disappeared: when turnstiles were installed at central stations the Russian Railways turnover evidently increased to such an extent that checking passengers' tickets between small stations became completely unnecessary.

But now - in both directions - we have people in special jackets with badges of the  "Central Suburban Rail Company". Almost no one objects to them, not even people without tickets, who get a special receipt, which gets them through the turnstile, if necessary.

The Central Suburban Rail Company is a new player in the railway transport market. It was created over a year ago as a subsidiary of the state monopoly, Russian Railways, and operates using their staff and rolling stock.  Ticket inspectors may have appeared over the last year, but the company's website is still not finished.  It bears the information that "the company serves passengers on routes extending over XX kilometres, and carries over XX passengers every day."  No, this doesn't mean 20 kilometres or 20 passengers. It means that the company itself doesn't know how many passengers it carries.

Or here's another difference in the "anti-crisis" journey out of Moscow: all the fences used to have graffiti in black paint saying things like "Azeris, get out of Russia", or "Believe and you will be saved". Now the graffiti are more romantic: "Crisis, war, revolution". All in the same black paint.

When I get to the dacha, I notice another change. Our dacha cooperative "Torfyanik", which means peat moor,  used to be looked after by a family of Armenians. Now we have Tajiks. What does this mean? An escalation in the battle between ethnic clans for construction jobs in the Moscow region? A drop in the demand for building fences, showers, toilets and garden paths? No, it turned out to be much more prosaic: the Armenians have gone to  "Orbita", the cooperative next door, where the pay is better...

My father arranged with some of the Tajik guards to fix his roof.  First the bargaining, then they reached an agreement and walked around the house, discussing the details in broken Russian. My father asked them: "If you've all come to Russia, who's left to build houses in Tajikistan?" "Who do you think?" the Tajik replied. "The Chinese. They're cheap labour".

According to official data, immigrants from Tajikistan send $1.5-2 billion home every year (the unofficial figure is much higher).  Along with the export of cotton and aluminum, income from Tajiks working abroad forms the basis of the country's budget. The revenue from these migrants could drop by at least a third in 2009, according to forecasts by the Tajikistan government. But it obviously won't be because of one individual dacha cooperative...

15 years ago there used to be flower and vegetable beds at the dachas, but they were dug up about five or six years ago and grass was planted. Now it needs to be mown. By 2009 everyone in the area had bought lawn mowers, and mowing the grass became a popular occupation. "We came here yesterday, and the grass has grown up so much," my father complained, as he turned the lawnmower on again. The neighbour to the left was also doing some mowing; he and my father were competing. The neighbour opposite was envious, as he only has a manual trimmer. Next year he's thinking of buying a lawnmower... Out of interest, I looked on the internet to see how much they cost. A trimmer costs from 3-23,000 rubles (US$ 100-800). A lawnmower from 3-46,000 (US$ 100-1500).

But even such expensive equipment is not the dacha owner's biggest outlay.  The neighbour with the trimmer was still building his house. The other neighbour was finishing off his garage. My father was fixing his roof.

Do I need to tell you that the market selling building materials next to our dachas has not closed down because of the crisis? Judging by the way sales are going, it's not exactly poor either.

Or was that just my impression? Again official statistics tell a different story. According to the Moscow Region Statistics Board, concrete production fell by 28.3% in the first quarter of 2009  by comparison with the same period last year.  The production of pre-cast concrete structures and units dropped by 41.5%, and of bricks by 47.2%. This means that building materials markets should have only their old supplies to sell. But there is plenty of selling going on - I can see it for myself.

I also see crowded dacha plots. 10 years ago I used to spend all my free time at the dacha. Village life was dying out there, along with the old people.  Muscovites increasingly came to Torfyanik only at weekends, to make merry with their friends in a natural setting.

Now everything has changed. Boys and girls run up and down the streets again, and kids ride their bikes. You can even hear babies crying in the houses at bath time. The smell of cabbage soup or shchi wafts between the houses, mixing with the smell of smoke from barrels of burning rubbish.

Can the reawakening of dacha life be explained by statistics? Yes it can: travel agents' figures show that tourism to foreign beach resort destinations has fallen by 25% in 2009.   So where did all these people go? To dachas, of course. To their forgotten mothers-in-law, grandfathers, friends from childhood, or even to rented houses...

Is this logical? Of course. But prices for renting dachas are not only not increasing, they are actually falling, in line with the overall trend in the property market. Some experts quote a 30% drop, while others say it's  20-25% compared with last year. Supply on the market continues to exceed demand... so many dachas must be standing empty.  The only thing is I haven't seen any.

And last of all. Upstairs at my dacha I have a small library of "second wave" books. These are books I would never read in Moscow, but which I feel are important. Soviet classics, generals' war memoirs and old copies of the literary journals Novy Mir and Roman-gazeta....

I remembered about these books as I was leaving the dacha.  I looked at the shelves, and decided to take Engels' "Anti-Duehring" to Moscow. After all, the statistics tell us there's a crisis going on. And soon it'll be the second wave.

On 30 April the internet site gazeta.ru published an article by Andrei Illarionov, former economic advisor to the President. The title "A leap backwards" speaks for itself. The article shows that industrial production fell to its lowest point in February this year, a fall of 23.4% from the peak in December 2007.   The following month saw an increase of 3%. But it is still unclear whether this really indicates a rise in production or just the fluctuations characteristic of a depression.   

But barely had we finished reading this article when there was more bad news. In April the Federal Service of State Statistics' index of industrial production showed a further deterioration, a fall of 16.9% by comparison with the previous April. This was the most significant fall since February 2009 - 16%. It was also the biggest fall since production fell by 18% in 1994. Between January and April industrial production fell by 14.9% by comparison with the same period in the previous year. Although March saw a growth of 11% over February, there was a further fall in April of 8.1%.

Mining production figures remained unchanged between March and April at 11.8%.  There was a slight increase in the production and distribution of electricity and gas (by 0.3% to 2.6%).

As for manufacturing, there was a 20.8% fall in March by comparison with the previous year, and the April figure was 25.1%. The headlong downward spiral in manufacturing has continued and has spread to the production of gas and steam turbines, which fell in April by 60.1% and 90.1% respectively.

A preliminary report on fluctuations in GDP from the Russian Ministry of Economic Development for the first quarter suggests that there has been a decline of 9.5%. It is clear from this report that Russians have not yet felt the full force of the crisis. Real incomes and salaries have only fallen by 2.3%. Turnover in the retail sector has decreased by even less (1.1%), and activity in the service sector has fallen by 1.5%.

However, the prospects are far from rosy. In previous years the main engines of growth were wholesale and retail trade, vehicle repairs and motorcycles, household goods and items of personal use. In 2009 the picture will be very different. The Ministry's figures show a decline of 6.1% in value added in the wholesale and retail sectors.

Thus, a review of the wholesale sector leads to the conclusion that the current comparatively comfortable situation in the retail and service sectors will not last long. The situation in retail did not look so bad in the first quarter of 2009 because of the rush to stockpile durables in expectation of worse times to come.

The situation in the labour market is serious. According to the International Labour Organization there were 7.5 million people unemployed in March 2009. This represents 10% of the economically active population. Furthermore, as the Ministry report shows, the number of unemployed is likely to increase if people who are now working part time, on down time or taking unpaid leave proceed to lose their jobs. As of 18 March this year the total number of such employees was 1.2 million.

According to Evgeny Gontmakher, head of the Centre for Social Studies at the Russian Academy of Sciences, unemployment may reach 10 million by the end of 2009. This would mean that one in seven Russians of working age would be unemployed. But some officials are more optimistic. On 30 March Deputy Prime Minister Alexander Zhukov said that fewer people were signing on and that peak unemployment had passed.

Any review of the Russian economy and its problems, particularly employment, should bear in mind that the socio-economic situation of the country's many regions is very different. There are also many so-called "mono-industrial cities", where a single major enterprise provides employment to a large section of the population and life in the city depends on it.

Financial sector

"Bad debt" is often cited as one of the most serious threats in Russia at the moment. Indeed, Finance Minister Alexei Kudrin has suggested that a sharp upturn in non-performing loans might lead to a further deterioration in the economy. The Ministry's report shows that in the overall volume of loans to non-financial organisations the percentage of outstanding debts has increased from 2.1% on 1 January to 3.1% two months later - though Kudrin gave a much higher figure at a meeting with bankers.

This discrepancy was later explained by the Minister himself in an interview with the Russian newspaper Vedomosti on 22 April. "In Russia non-performing loans include defaults on specific payments. But in the West the methodology is more complex. To bring the Russian figure into line with international standards, it should be multiplied by 2.5". This means that as of 1 March the figure for credit defaults in Russia was 7.75%. Pyotr Aven, president of Alfa Bank, one of Russia's largest private banks, forecasts that by the end of this year this figure may reach 15-20%. Similar predictions have been made by the former deputy chairman of the Central Bank of Russia and the present deputy president of the Association of Russian banks Alexander Khandruev. The latter believes that a level of "bad debt" of 10-15% is critical for the stability of the entire Russian system.

The second threat, about which there was a lot of discussion last winter, concerned the foreign liabilities of Russian companies and banks. This is now mentioned much less often. But the threat has not gone away. The Minister for Economic Development and Trade Elvira Nabiullina announced on 19 March that the external liabilities of Russian companies and banks had increased from $175 billion to $500 billion in the last three years.

Russia's foreign debt payments for 2009 will amount to $152 billion. Companies and enterprises account for $86 billion of this. Russian banks owe another $60 billion. The foreign debts of enterprises and banks comprise liabilities on both loans and bonds they have issued. Many commentators believe it highly likely that Russian companies and banks will look for ways to restructure their debts.

At the end of May the head of the Russian Central Bank Sergei Ignatiev said that there would be no fall in the upper limit of the dollar-euro basket, which had been set at 41 rubles. On the day he said this it was fluctuating around the level of 37.7 rubles.

Experts warn of the likelihood of further devaluation, as a result of which the dollar-euro basket could rise to 45 rubles. From July of last year to February of this year, the ruble-dollar rate fell by over 50%, after which the ruble began to pick up again. As a result, the ruble is now 35% lower in value than it was last July.

Russia is nevertheless experiencing a period of temporary stability at the moment. The price of oil has risen to more than $60, and stock indexes have doubled. The question is how much longer this period of grace will last.