Parliamentary elections proceeded in line with expectations, with the ruling United Russia party winning 50% of the vote, but thanks to single mandate voting, it obtained 72% (or 324 of 450) of seats, a constitutional majority allowing it to legislate unilaterally. The result was slightly lower than previous elections in 2016. Half of Duma seats are determined by party lists, while the other half by majority districts for candidates. The Communist Party of Russia obtained nearly 20% of votes—the second-highest level—thanks to so-called Smart Voting that encouraged the opposition to support the party, though providing it with just 13% of seats. Three other smaller parties obtained above 5% of votes, giving them a few seats in the Duma. The Duma elections were marred by low voter turnout, only around 50% of voters, and some 4,500 violations were reported by the opposition, though with no major protest actions. Three days of voting and increased electronic voting reduced the transparency of the elections, while pre-election repression of media and opposition candidates aided the positive result for United Russia.
Our View
The results of the Duma elections were as expected, reflecting both a positive development for the Kremlin as well as the continuation of foundational political problems it must contend with in the years to come. The Duma elections served as a major test in advance of the 2024 presidential election, which the Kremlin passed, having won the elections, and in addition legitimized the party’s governance, increased its power over the country, diminished the opposition further, and faced no major street protests. Foreign criticism was mild, ineffective, and dismissed. Still, low overall approval ratings (only 27% popular support for United Russia, according to independent polling) and a weaker result for United Russia than in the previous elections better reflect Kremlin electoral machinations more so than strong support from the society. With a lot of time between now and 2024, the Kremlin will be further tested and needs to create a new social contract with the people, i.e., offer improved living standards in exchange for the power it wants to continue to hold. To achieve this, medium-term economic policy is likely to be oriented toward higher taxes on the wealthy and strong industries, thereby increasing social spending to lower incomes and driving a stronger development agenda focused on infrastructure. Meanwhile, foreign policy will seek to be less antagonistic in order to avoid sanctions and not upset gains in living standards.
Business Implications
United Russia will continue to support Kremlin policy, creating continuity in economic, foreign, and domestic political policies at least until the 2024 presidential election. The lack of protests, a stable ruble, and a strengthening macroeconomic position further aid predictability and thus planning for the short-, medium-, and long terms. However, higher taxes on the wealthy and profitable sectors to redistribute to lower-income households will weigh minimally on sentiment.
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