Publication: Fortnight in Review Volume: 8 Issue: 2

?The Aksenenko firing and the Sibur crackdown were all to the good and highly encouraging to some. A major American business magazine even declared that Russia’s government had at last decided to clean house. This being Russia, however, not all was as it seemed. Some observers fairly asked the question whether Putin and his team were truly interested in eradicating graft, asset stripping and increasing transparency or simply in putting their loyalists into the country’s main loci of financial and political power. Indeed, while an old Railways Ministry veteran, Gennady Fadeyev, was tapped to replace Aksenenko, a close Putin associate, Aleksandr Kuznetsov, was rumored to be on deck to become the ministry’s Number Two and the real future railways chief. Fadeyev’s appointment, some observers said, was simply a stopgap measure to allow Kuznetsov–whose relationship with Putin goes back to their days together in St. Petersburg’s city government–time to learn his way around the Railways Ministry and provide a decent interval before the Kremlin raised its flag over that fiefdom.

In addition, the experience of Aleksei Miller’s accession as Gazprom chief suggested that the Putinites’ reformist zeal, like that of many putative reformers before them, tended to be inversely proportional to their proximity to power. Indeed while the government had vowed following Vyakhirev’s ouster that Gazprom’s production units would be split off from its gas transportation system to increase “transparency and effectiveness,” Miller declared last December that the company would not be split up anytime soon. That same month, the state’s Vneshtorgbank extended Gazprom a US$500 million loan, at a highly favorable interest rate, to help the gas giant pay its taxes before year’s end. The money for the loan apparently originated with Russia’s Central Bank, which deposited US$700 million in Vneshtorgbank in early December, causing a US$1.2 billion drop in Russia’s hard currency reserves as of December 14. The move looked an awful lot like the “creative financing” of the Yeltsin years.