All the criticism of Russia's deeply flawed presidential election yesterday misses the point: the election was doubtless a farce, with no serious opposition to the Kremlin's man. But Vladimir Putin deserves credit for doing what no other Russian leader has ever done--he voluntarily ceded power at the height of his political career. Boris Yeltsin's 2000 resignation falls into a different category: there was no way he had the health or popularity to continue. Putin does. So for all the terrible things he has wreaked on Russia during his tenure--dismantling Russia's democracy chief among them--one must at least salute the man for keeping his word and respecting the letter, if not the spirit, of Russia's constitution.

The inheritance which he's passing to Dmitry Medvedev, the unsurprising victor of Sunday's vote by a landslide of over 70%, is a different matter. As this week's Economist argues, there are dark clouds on the economic horizon. Putin's reaped the benefits of three years of meteoric rises in oil and gas prices, which have allowed him the luxury, unknown to politicians in the West, of booming State revenues without any increase in taxation. But the flip side of Russia's oil-fuelled boom has been brutal inflation and a growing poverty gap.

Putin presided over the party, now Medvedev has to deal with the hangover. The only way to get the Russian economy working is to encourage small and medium businesses and rein in inefficient State owned-giants which have increasingly dominated the economy. But that means reversing some of Putin's most fundamental policies, which included doubling the bureaucracy from under 800,000 in 2000 to over 1.6 million today, and encouraging the growth of state behemoths such as the military-industrial giant Almaz-Antei, which swallowed great chunks of once private defense contractors. Most painfully of all, Medvedev's going to have to tackle the terrific corruption which is endemic in Putin's state-dominated system. All indicators on official corruption, from the World Bank to Transparency International, show a brutal rise in corruption--and without a free press or independent politicians to challenge official corruption, graft flourishes, strangling the real economy. These deep systemic problems have been masked by the happy tide of free cash gushing in from oil and gas, but if that tide recedes, the ugly wreckage which is the remains of Russia's real economy will be uncovered.

Medvedev's biggest problem will be that he will get the blame for economic failures which are not of his own making. By contrast, Putin's reign, where those deep systemic problems were created, will be remembered as a time of economic prosperity and national greatness. Like Leonid Brezhnev, Putin has presided over an economic boom and used its spoils to throw Russia's weight around on the world stage. In truth, both men allowed the fundamentals of the economy to grow sclerotic. Even many of the macroeconomic figures which Putin's fans cite for the growth of Russia's real economy are flawed. One example is foreign investment. Last year's figure was a record $120 billion, including equity investment. But much of that cash is in reality Russian capital coming back into the country from offshore banks--certainly better than the capital flight of the 1990s, but the numbers distort the real levels of international capital in Russia's markets. And many sectors where foreign direct investment seems to be healthy--for instance car manufacturing--are also misleading. Most foreign car plants in Russia, for instance, take nearly complete units imported from abroad and add simple parts like wheels, bumpers and headlights in Russia, thereby avoiding customs duties. But that kind of tax dodge doesn't add much value to the Russian economy. Indeed, even Russia's biggest export industry, its $7 billion a year arms businesses, took a blow this month when Algeria tried to return 15 Sukhoi fighter bombers it had bought last year. Dmitry Medvedev's task is a thankless one: to fix the fundamentals of the Russian economy while reaping nothing but criticism for the mistakes of his predecessor.