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Vladimir Putin is a changed man. Only a few months ago the Russian prime minister walked into the VTB Capital investment conference with an arrogant swagger that slapped you in the face. On February 2, a "New Putin" arrived to speak at the Troika Dialog Moscow Forum - a humbler man, who fumbled through a speech and subsequent discussion.

Putin was playing to two audiences: a room full of big international investors and Russia's voting public. In his speech, he ran through the strong economic position Russia enjoys and contrasted that to where the rest of Europe finds itself today. Then dropped a bomb on the investors. "Russia has a unique natural resource base and human capital, but these are not being used properly. As result, although Russia's GDP is comparable to Germany's, the former's labour productivity is a third of the latter's. One of the key problems is the poor investment climate. According to international polls, Russia ranks 120th globally [in the World Bank's "Doing Business" survey]. The next government must move Russia up to 20th place."

This is an extraordinary statement. It means Russia would have to "do a Georgia" (which is currently ranked 16 on the World Bank's list) and make all the deep structural reforms that investors and international financial institutions have been baying for. It means things like emulating Georgian President Mikheil Saakashvili's order to sack the entire police force, and slash the number of state agencies and the permits they issue to a quarter or less. It means one-stop shops and forcing the Russian chernovniki that run the bureaucracy to become honest. What Putin is in effect talking about is "Gref plan" 2.0 - a repeat of the economic reforms launched in 2002 that led to Russia's extraordinary transformation. Poignantly, German Gref, the architect of those reforms and now the chairman of Sberbank, was moderating the session.

Brilliant. Well almost. Putin failed to put a time frame on when this goal would be achieved and apart from setting some quotas, like increasing the speed of transport seven-fold, we are still waiting for the details of the plan. "The lack of a time frame is a symptomatic problem, as it doesn't send a strong signal of confidence. The goal is important, but it also needs a detailed time plan, as it can't be done overnight," Eric BerGhof, chief economist at the European Bank for Reconstruction and Development (EBRD) told bne. "You need steps; a series of small wins with a vision that stands behind to drive the process."

Domestic audience

Presumably, the details of the new plan will be released and publically debated after the presidential election and there is little doubt that Putin will win in March. However, despite Putin's fame for his meticulous preparation, he looked distinctly lost and confused during his performance at this event; Putin flubbed his lines on several occasions and ended up looking seriously outclassed by the other panellists of Nobel economist Paul Krugman, bond legend Michael Milken and rising star Raghuram Rajan, the Professor of Finance at the University of Chicago's Booth School of Business.

In his introductory remarks, Putin acknowledged the "man who predicted the crisis" and turned back and named Paul Krugman. Of course, it was Nouriel Roubini that has been credited with the call, who was supposed to be on the panel but failed to show.

Later after the speeches, Putin rounded on each of the panellists in turn with pre-set questions where he was patently attempting to score points to support his election strategy. But in a Rick Perry moment, he launched on a question about government, but forgot the ending, saying he couldn't read the handwriting in his notes.

And the questioning of the experts backfired several times. Putin asked Rajan: "Tell me what is the level of poverty in the US," blatantly fishing for the official number of 15%, which compares favourably with Russia's official level of 12.5% and is part of his core election message. The trouble was he didn't get the number, but a nuanced discussion of relative levels of poverty and standards of living.

A bit later on, Putin rambled on about the gridlock in US politics and the inability of Congress to tackle the huge economic problems that the country faces, suggesting the state's only alternative is to cut social benefits and hurt the people. It's a good point and the same conclusion reached by the panel on the Future of Financial Markets, led by former British prime minister Gordon Brown the next day.

However, Krugman rounded on Putin and while he admitted that the western political process is messy, finished with: "But if you are suggesting that the solution to solving these problems is to roll back democracy, then I disagree with you entirely." That drew a resounding round of applause from the audience.

I have only seen Putin fluff one other public appearance so badly - the day he spoke to the families of sailors trapped on the sunken Kursk nuclear submarine a few months after taking over as president in 2000.

Oddly enough, bad as his performance was, Putin probably did enough to achieve his goals. While the long-term Russia hands said afterwards they had never seen the PM so discombobulated in public before, the visiting investors, who gathered at the posh Novikov restaurant Mr Lee later that evening, were extremely bullish. The consensus view that Russia will have a bad first half of this year, but could boom in the second half is being borne out so far. "I must say that I can't remember when I've seen everyone more optimistic that big changes were on the way," says the EBRD's Berglof.

Likewise, while Putin's debate with the boffins was not particularly polished, he did project a humbler image and scored most of his points, even if he would have been defeated if the debate were put to vote. With a little bit of editing (actually quiet a lot of editing), you still had a nice package for the evening news.

The bottom line is that the democracy protestors, who marched again at the weekend, clearly have had a big impact on Putin, in that he's attempting to total re-make his public persona. He learnt the lesson of the Kursk and in a mini-revolution took personal responsibility for the tragedy post factum. He doesn't need to convince everyone that he has turned over a new leaf; rather his strategy is to whittle away at the opposition frustration, and this speech will surely peal off a few more protestors.

The investors were certainly buoyed. But having the right ideas has never been Russia's problem; it's the implementation where it always falls down. That is the irony of the Russia story: huge progress has been made and some reforms like telecommunications have been spectacularly successful; others like power and banking have been moderately successful. But these achievements are always countered by such poor PR no one is ever willing to give Russia any credit for its progress; it is forced to squeeze the investment out of investors drop by drop.

The bigger question is whether the "New Putin" will only be around for a month, after which the swagger will reappear.

Personally, I don't think so. The protests and the economic necessities have forced Putin to respond and even when he is ensconced back in his old job in the Kremlin, neither of these pressures will disappear. The major change is that only three months ago he was above politics, but since December he has become part of the process and is more accountable than ever before for what he says and does.