Not A Very New Russian Government

Last Friday, after an unusually long pause for thinking, the members of the new Russian cabinet were announced. The only thing is, to refer to it as “new” is rather exaggerated. In total three ministers were replaced: German Gref left the chair for economic development, Mikhail Zurabov had to quit as minister for health and social affairs and Vladimir Yakovlev is no longer handling the regional development portfolio. Now, will this in any way have an affect on policies? Let’s have a look at these cases one by one.

Everybody is pretty relieved that Mikhail Zurabov is gone. He was in general believed to be a total disaster at his post and most people are surprised he was even able to remain for so long. His successor is Tatiana Golikova (who is actually married to Viktor Khristenko, the minister for industry and energy), a former deputy finance minister and a skilled economist. Even though most analysts are unsure about how much influence she will be able to exercise, she could not possible be any worse than her predecessor.

The replacement of Vladimir Yakovlev with Dmitri Kozak is interesting. Kozak and Putin go back quite some time and he is the President’s must trusted doer. As the presidential envoy to the Southern Federal District (which includes, among other troublesome places, Chechnya) he is believed to have eased tensions somewhat and helped the federal leadership get rid of some of the worst local leaders (people that were bad even by Russian standards). His appointment is therefore an indication of the president putting more emphasis on regional development. Another sign of this is the fact that his ministry has recently received several billion dollars from the state Investment Fund to spend. 

German Gref, then, was widely acknowledged as being an economic reformist and fiscal conservative. He has been receiving a lot of credit for the ambition to reform Russia’s business life, but did not manage to get it into the World Trade Organization. Trying to do any reforming of Russian business should be tiring to anyone and rumour has it that Gref has been eager to leave for some time. His replacement, Elvira Naibullina, is believed to share his liberal views, but the amount of influence she will be able to exercise is yet to be seen.

With Gref gone, the only one of the three fiscal hawks that have served to preserve the Russian economic wonder through fiscal sanity (the third one being Putin’s former economic advisor Andrei Illarionov, who had to resign a few years ago due to being too outspoken on the Yukos affair) that remains is Aleksei Kudrin, who’s position was strengthened as he was named deputy prime minister in this last reshuffle. However, all alone perhaps, will he be able to withstand the pressure emanating from a new president that, eager to create for himself his own popularity base, might want to spend some of the money these gentlemen have been saving for a rainy day? Let’s keep a lookout.