Under Russian law, Putin cannot run for another term as President. While he's said he'll step down, it's less clear that he'll actually give up power: On December 10, Putin announced his support for Dmitri A. Medvedev as his successor, virtually guaranteeing him a victory in this March's presidential election. The next day, Medvedev said that he would name Putin Prime Minister, the second most powerful position in the government, and not surprisingly, Putin accepted the offer.
If Putin continues to control Russia, it raises a critical question: Can a nation run by someone who is no longer the elected head of state call itself a democracy?
Michael McFaul, a Russia expert at Stanford University, doesn't think so: "If you want a really simple definition, it's this: Democracy is when incumbents lose elections. That is not the case in Russia today."
Western-style democracy is not a natural fit for Russia. For 350 years, Russia was ruled by powerful czars, and the Soviet UnionAmerica's main adversary during the Cold Warwas a Communist dictatorship for most of the 20th century.
The years after the disintegration of the Soviet Union in 1991 were marked by chaos and economic collapse. When Putin succeeded President Boris Yeltsin in 1999, most Russians were relieved to have a strong President who wanted to put Russia's house in order and restore its position as a world power.
Russia's economy has thrived under Putin. Foreign investment and the stock market have soared, and high oil prices have provided a boost since Russia is the second-largest crude oil exporter. Consumer goods long denied to most Russians under Communist rule are widely available, and millions more Russians, part of a growing middle class, are able to afford them.
But at the same time, Putina former K.G.B. agenthas concentrated power in his hands. He approved laws that restrict freedom of expression and shut down independent TV stations. Rivals have been jailed, and the government is alleged to have been involved in killing opponents, in Russia and abroad.
December's parliamentary elections (which Putin's party, United Russia, won in a landslide) were plagued by accusations of unfairness. Garry Kasparov, the former world chess champion, and other opposition leaders say they were harassed, and government workers say they were told to vote for United Russia.
This has stirred fears that Medvedev and Putin might push through laws to give the Prime Minister more power, or that Medvedev might resign with Putin returning to the presidency.
Grigory A. Yavlinsky, an opposition leader, says Putin is in a bind because he wants to retain power but doesn't want to be seen as illegitimate.
"Now the time has come to make a transfer of power," Yavlinsky says, "and he really, really has no idea how to do that. And nobody else has any idea."
In naming Putin "Person of the Year" for 2007, Time magazine wrote: "At significant cost to the principles and ideas that free nations prize, he has performed an extraordinary feat of leadership in imposing stability on a nation that has rarely known it and brought Russia back to the world table."
But, Time says, "Whether he proves to be a reformer or an autocrat who takes Russia back to an era of repression...we will only know over the next decade." By Clifford J. Levy in Moscow