Russia's Kudrin pays price for going off script

Vladimir Putin’s strategy for a smooth return to the Kremlin appears to have gone off script with the departure of Finance Minister Alexei Kudrin.

The removal of such a trusted ally on Monday is unlikely to have been part of Putin’s plan when he announced on Saturday that he wanted to reclaim the presidency in an election next March after nearly four years as prime minister.

Although nothing can be taken for granted in Russia’s Byzantine political system, feuds like the one that broke out between Kudrin and President Dmitry Medvedev are rare at such a high level, pointing to personal rivalries as much as the differences they cited over policy.

The revolt opened up cracks in the unity that Putin and Medvedev had portrayed in their plan, but there is no sign of anyone else dissenting in the upper echelons of power and Kudrin’s removal is intended to deter any further resistance.

“Experience with Putin’s Russia suggests that most political events are closely ‘managed’ ... That said, I find it difficult to imagine that the manner of Kudrin’s departure fits into a managed script,” said Tim Ash, emerging market economist at Royal Bank of Scotland.

“It is difficult to conceive that the administration would have wanted to have lost its most trusted and capable economic manager. This is all very un-Putin like, and seems something of an own goal.”

Putin (58) and Kudrin (50) have been allies since they worked together in the St Petersburg city authorities in the 1990s. Kudrin helped bring Putin to the Kremlin administration and Putin appointed his ally as finance minister in 2000.

Foreign investors saw Kudrin as the person most likely to carry out far-reaching economic reforms in the next government even though he has shown financial prudence rather than tackling reforms in 11 years as finance minister.

There is no obvious successor to Kudrin as finance minister and Western economists’ unanimous presentation of his departure as bad for Russia’s economy is hardly a scenario Putin would have welcomed.

Kudrin could resurface close to Putin
Cliff Kupchan of the Eurasia group, a US-based consultancy, said Kudrin’s removal “threw a wrench into the plan when he resigned under pressure from Medvedev”.

Kudrin may have been driven by personal ambition after dropping hints that he had little interest in continuing as finance minister and wanted to be prime minister.

He may also have concluded that whoever is the next prime minister could quickly be made a scapegoat if he or she takes on the tough challenges of overhauling the pension system and reducing Russia’s reliance on energy revenues.

“Most Moscow insiders believe Kudrin will resurface in a position close to Putin, as the two are very close,” Kupchan said.

“The Kudrin episode does suggest Putin did not have all his ducks in a row before making his plan public, but if there are no further fractures among the elite and Kudrin resurfaces, the damage will probably be limited.”

It is rare for Putin to be caught off guard, so much so that some analysts may see it all as part of Putin’s grand plan.

Under this scenario, Kudrin could have been sacrificed as a way to undermine Medvedev, although Putin had already done this by forcing him to step aside and clear the way for the former KGB spy to go back to the Kremlin.

Even so, most political analysts believe this was not what Putin had in mind and his decision to sacrifice such a close ally to end the dispute signals that he is not about to allow genuine debate and criticism of policy to become the norm.

“Putin seems to have decided that Kudrin’s head was a price to be paid to ensure his smooth succession back to the presidency,” Ash said.

Failing to force out Kudrin after he had criticised Medvedev so publicly would have undermined the president and this could have undermined the power ‘tandem’ in which he and Putin rule Russia.

Medvedev is also vital to the hopes of Putin’s United Russia party maintaining its two-thirds majority in Parliament in an election on December 4 because he is top of its list of candidates. Badly wounding Medvedev could therefore hurt Putin’s interests.

Popularity ratings
There are some precedents for public disagreements since Putin began his first spell as president in 2000, even between the president and prime minister, but they are rare.

Medvedev and Putin briefly differed over policy on Libya this year. The prime minister said UN authorised air strikes on Libya reminded him of a medieval call for a crusade and the president said such language was unacceptable.

The last open and bitter feud at a high level was in 2004 when the then prime minister, Mikhail Kasyanov, fell out with Putin, who was president at the time. Kasyanov went into opposition and his political career has never recovered.

Putin will be anxious to prevent such public feuding again because he has long impressed ordinary Russians by showing he is firmly in control and continuing to doing so is important to preventing his popularity falling.

“... one aspect of Putin’s politics has remained unchanged: his sensitivity to popular support,” said Livit Gevorgyan of IHS Global Insight.

“Putin’s winning card is his popularity among ordinary Russians and, although it is waning, Putin is still the most popular political leader in the country. He is aware that without this support, his political rule and legacy is going to be short-lived.” - Reuters



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