Perspectives on Russia

Just a few words on the fact that Mikhail Fradkov, who was forced to resign as prime minister in the last government shake-up, was appointment head of the Foreign Intelligence Service (SVR), replacing Sergei Lebedev (in turn made Secretary-General of the Commonwealth of Independent States, the organisational heir to the Soviet Union). This should serve as proof that Fradkov was not relieved of his duties as prime minister because of any incompetence. Incompetent people seldom end up as intelligence bosses. Let us not forget that President Putin himself started his career within the then KGB foreign intelligence directorate.

Since obviously Putin still has trust in Fradkov, the question arises why he was kicked out of his White House office. (If you don’t know your way around Moscow; the White House is most famous for being shot at with tanks in 1993 on the orders of then President Yeltsin, when it was the home of Parliament; it is now the house of the federal government). It could be because attempting to breed Fradkov as a potential presidential candidate for next spring was a no-brainer. Without any charisma and seen as a political nobody, the up-hill battle might have been considered too great. Also, his government were responsible for trying to reform the system of social benefits for pensioners, veterans and the like; this was something that brought huge crowds out on the streets to protest (a rare view of Russian democracy!) and did hurt the regime. These memories could prove to become a severe liability.

Fradkov’s successor, Viktor Zubkov, on the other hand has taken a rather colourful stand on several issues, yelling at cabinet members for not completing the tasks awarded by the president and even sending a senior government official off to remote Sakhalin to speed up the distribution of relief funds after an earthquake there. This last thing was widely recognised as merely nothing but a populist measure to show strength, but it is still quite hands-on. It might be,  and I know I’m about to contradict myself here with regards to an earlier article, that the Kremlin is trying to create a positive image of Zubkov, so that he could run for president when Putin steps down. At 66, he would probably not last long, and with Putin as his prime minister he could quickly make him acting president again by resigning due to, say, health reasons. Or, it could all be a smoke-screen and someone else, previously known or not, might pop up and make a run for it. Russian politics are, as we all know by now,  nothing but an endless row of complete surprises. There is never a dull moment.

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.