The world recession might ruin Putin’s intricate plans to maintain control of the country from his new position as prime minister.

It was rather charming how the inauguration of the new president and the appointment of the old president as the new prime minister fit nicely between Labor Day on May 1 and Victory Day on May 9. Russians commemorated the events by celebrating nonstop for 10 days in a row.

But, returning to work on May 12 after the prolonged holidays, Russians must have asked themselves, "What really happened during those days in the beginning of May, when the nation was supposed to undergo a transfer of power?" The president is apparently new, but the previous president appointed him as his successor.

Russia’s leaders have managed to come up with a complicated political mindtwister involving the creation of two power centers. But the answer to the puzzle will eventually be found, and when this happens, it probably won’t be pleasant for those who created the conundrum in the first place.

Dmitry Medvedev will now attempt to become a genuine president and not just a decorative head of state. But he will encounter heavy resistance — not from Prime Minister Vladimir Putin, who willingly relinquished his post, but from the ambitions of numerous officials who understand that the key to retaining their positions and benefits is to curry favor with Putin and not with Medvedev.

A diarchy is not only when two leaders rule the country, but when the institutions of power are divided in such a way that it is unclear where the authority of one begins and the other ends. In this sense, the Russian diarchy is already a reality, and no amount of good will or friendship between the current and former presidents will be able to change this.

The next few months will be spent on the entertaining game of hanging new nameplates on office doors, printing new business cards and rearranging office furniture. Bureaucrats leaving the White House for the Kremlin will cross paths with colleagues heading in the opposite direction. These officials will have to complete the major migration by mid-July, when their summer vacations begin.

Once they return from vacation, the bureaucrats will encounter a mountain of unfinished work, as well as complete confusion over who answers to whom in the new hierarchy. This will mark the start of a new round in the amusing game of "Guess Who’s Boss!" The winner is the one who manages to find the right official in the correct department who is actually capable of dealing with the question at hand and who can guarantee that his or her decision will ultimately be carried out.

Putin’s main accomplishment as president was bringing order to the government after years of instability, but we may see a reversal of most of those gains. It is inevitable that the process of transferring power will have some serious glitches, similar to the bugs that come up in new releases of Windows.

All of this bureaucratic confusion might be amusing were it not for the impending global financial crisis. Optimistic observers rushed to assure us that we had overcome those "temporary hurdles" and could expect an economic upturn. The price of oil, which has managed to climb by 20 percent without an increase in demand, inspires even greater optimism. In light of so much good news, Kremlin and White House officials can nonchalantly go about planning their summer vacations.

But what if the government officials return from their vacations only to find that the world economy has sunk into recession and that the boom in oil prices turned out to be nothing more than the latest financial bubble?

The sound of that bubble exploding and the din of the crumbling foundation built on high oil prices could ruin all of Putin’s intricate plans of maintaining control of the country.

Boris Kagarlitsky, a fellow of the Transnational Institute, is a Director of the Institute of Globalization and Social Movements, Moscow. His latest book is Empire of the Periphery: Russia and the World System (2008)

The Moscow Times, 15 May 2008