A BIT OF KUDRIN AND KOZAK

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The new Cabinet: tension between Alexei Kudrin and Dmitri Kozak

Sparks will fly between Alexei Kudrin and Dmitri Kozak, the new minister for regional development. Kozak will control all of the government’s investment resources. Kudrin, as finance minister and deputy prime minister, will have to restrain his colleague’s financial appetites.


There have always been plenty of specters haunting the federal government building. The greatest mystery for its inhabitants, past and present, is why each and every government declares itself to be apolitical and thoroughly professional, yet ends up splitting for political or even ideological reasons. The specter of ideological and bureaucratic enmity is a permanent presence in the government building. Suffice it to note that only two Cabinets have been distinguished by solidarity: the first Gaidar Cabinet and the Primakov Cabinet.

In the previous Cabinet, Finance Minister Alexei Kudrin pursued one policy and almost all his colleagues insisted on another. Even Herman Gref, regarded as Kudrin’s ally, was heard to say that “Kudrin’s still living in 2003.” What he meant was that the economic situation has changed fundamentally since then: prioritizing the battle against inflation has become obsolete – it should be replaced by prioritizing investment, both state and private. This position was supported by almost all the ministers – and not only the ministers. Vladislav Surkov, deputy head of the presidential administration, gave his blessing to those calls for a different policy: “Accountants have no place in politics!”

Contrary to this wave of criticism, however, Kudrin has not only retained the finance portfolio in the new Cabinet, but gained a promotion to deputy prime minister responsible for macroeconomic affairs. This couldn’t have happened without President Putin’s support. But was Putin showing support for Kudrin’s policies, or maneuvering to maintain tension within the Cabinet? That question remains to be answered.

The lines of tension are evident already. Sparks will fly between Alexei Kudrin and Dmitri Kozak, the new minister for regional development. Having disarmed the Economic Development Ministry, Kozak will now control all of the government’s investment resources. Kudrin, as finance minister and deputy prime minister, will have to restrain his colleague’s financial appetites. On the one hand, it’s a perfectly normal situation. That’s why ministers have different roles and functions: so that arguments between them can generate economic policy. On the other hand, the political weight which Kozak has accumulated in the course of his diverse career is clearly not inferior to Kudrin’s. Further evidence of this is the fact that Kudrin has been allowed to appoint a former presidential envoy as his deputy (Kamil Iskhakov, former envoy for the Far East federal district). Prime Minister Viktor Zubkov and President Vladimir Putin are facing a busy political schedule in the coming months; they might simply have no time to work out who’s right and who’s wrong in disputes between ministers that start at the bureaucratic level but have the potential to escalate to the political level. So the Cabinet will hear a great deal from Kudrin and Kozak.

There are also some other conflicts smouldering in the Cabinet, with the potential to flare up. The new profile of the Economic Development and Trade Ministry is uncertain. In effect, it has been gutted – reduced to a research and forecasting center. It isn’t clear what Deputy Prime Minister Alexander Zhukov will do. In the Cabinet staff, they’re already joking that Zhukov would be prepared to oversee the Finance Ministry. It’s funny, of course, but also instructive. In reality, Zhukov is left with the task of supervising Semyon Vainshtok – newly-appointed head of the state corporation that will handle preparations for the 2014 Winter Olympics in Sochi. Zhukov is known as an excellent soccer player and chess player, but somehow that doesn’t seem sufficient to warrant the status of deputy prime minister.

In short, it’s business as usual. The Cabinet can hardly be accused of lacking team spirit. The problem is that there are several teams.

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