MercoPress. South Atlantic News Agency

Medvedev-Putin, now becomes Putin-Medvedev for the next six years

The president in a lavish ceremony in the Kremlin called for deep reforms in the economy to boost technology and investment (Photo: Afp)

Vladimir Putin, who was officially sworn in for a third term as president of Russia on Monday after four years of serving as the country’s prime minister, has nominated his predecessor Dmitry Medvedev to replace him as prime minister.

Putin began his historic third term in an opulent Kremlin ceremony shadowed by a second day of arrests of activists protesting his 12-year domination of Russia.

The former KGB spy, head of state from 2000-2008 and then prime minister, took over from outgoing president Dmitry Medvedev swearing to protect the rights of Russian citizens and also pledging a “new stage” in Russia's development.

The Kremlin bells echoed across Moscow and the presidential guard donned Tsarist-era uniforms for the brief but spectacular inauguration whose guests included old friends of Putin including Italian ex-premier Silvio Berlusconi.

Placing his right hand on a copy of the constitution, Putin swore to “respect and protect the rights and freedoms of the people” and defend Russia's security as he officially took over from Medvedev for a six-year term.

Among his first acts as president was to propose Medvedev to parliament as his prime minister, in line with a job swap scheme first announced in September that incensed the opposition.

The eve of the ceremony saw the worst clashes yet between police and anti-Putin protestors when a mass opposition demonstration descended into chaos and security forces wielded their batons to arrest hundreds of people.

Police said 436 people were detained in Sunday's protest, including the anti-Putin leaders Alexei Navalny and Sergei Udaltsov. Ultra-left winger Udaltsov was released with a fine after a night in jail while Navalny was due to have his case heard later by a Moscow court.

On Monday, Moscow police had arrested another 120 people, including liberal opposition leader Boris Nemtsov, as protestors sought to hold unsanctioned rallies in defiance of a heavy riot police lockdown of the city.

Police said they would all be released after a warning but the arrests were in stark contrast to peaceful mass anti-Putin protests last winter which smashed the taboo against big opposition rallies.

Riot police in full “cosmonaut” gear -- so called because of their space-age helmets -- on Monday stalked the city at potential protest meeting points.

Activists accuse Putin of systematically sacrificing rights in the pursuit of stability and lacking legitimacy after his knockout March 4 election victory with 63.6% of the vote, which was marred by claims of fraud.

Putin said in a brief speech after his swearing-in that Russia was now “reborn” and vowed to take it to a “new stage” of development during his six-year Kremlin mandate.

“We will have to decide tasks of a new level, a new quality and scale. The coming years will be decisive for Russia's fate for decades to come,” he said.

He ordered the government to take measures to raise capital investment to no less than 25% of GDP in 2015, from the current level of 20% and to create 25 million high productivity jobs by 2020.

The incoming president also called for a 50% increase in labour productivity by 2018 and a 30% increase in the share of high tech products in GDP in order to lessen Russia's dependency on natural resources.

Putin, who has repeatedly spoken out against corruption and red tape, with little obvious success, also said he wants Russia to climb from the 120th place it occupies now in the World Bank's Doing Business index to 50th place in 2015, and 20th place in 2018.

Committing to project a strong Russia in foreign policy, Putin said Moscow would be a “reliable, open, honest and predictable partner” but also “the centre of gravity for the entire Eurasia”.

Minutes after the Kremlin ceremony, Medvedev passed Putin the black “nuclear suitcase” with the codes that control the country's vast nuclear arsenal, official images showed.

And only hours after taking office, Putin signed a raft of economy-related decrees and held his first meeting as new president, with Olympics chief Jacques Rogge on Russia's hosting of the 2014 Sochi Winter Games.