Publication: Eurasia Daily Monitor Volume: 2 Issue: 216

Russian President Dmitry Medvedev

Russian President Vladimir Putin’s latest personnel shakeup is likely to affect the country’s Far Eastern region, as well as relations with some neighboring states.

When Putin promoted his chief of staff, Dmitry Medvedev, to the post of first deputy prime minister on November 14, the change sparked intense speculation that a succession scenario is under way. Medvedev is set to become a “shadow prime minister,” and he may well become the president’s successor, Izvestiya commented on November 15.

Yet apart from succession talk, Medvedev is still chairman of the board of Gazprom, Russia’s natural gas giant with growing interests in East Siberian and Sakhalin gas projects. Medvedev also has been an active supporter of the proposed Pacific oil pipeline. Therefore, his appointment could expedite the government’s decision-making process regarding the pipeline and other energy projects in the Far East.

In April 2005, Medvedev described the proposed Taishet-Skovorodino-Perevoznaya Bay oil pipeline as a major project that could boost development in Siberia and the Russian Far East. He also conceded that the failure to develop Siberia and the Far East could eventually undermine Russia’s territorial integrity. “Otherwise it would be developed by someone other than us,” he warned (see EDM, April 13).

But while Medvedev had pledged that the Pacific oil pipeline plans would be finalized by May 1, the blueprint is still not complete, suggesting that Medvedev’s clout over the country’s energy sectors has its limits.

Putin named Sergei Sobyanin, former governor of the oil-rich Tyumen region, to replace Medvedev as presidential chief of staff. Nearly half of Russia’s total crude oil output is currently pumped in Tyumen region. “You all know well that Russia’s wealth will be supplemented by Siberia, hence Tyumen Governor Sergei Sobyanin was appointed,” Putin said in televised remarks. Thus the personnel shift appears to indicate an increased focus on the country’s hydrocarbon sector, at least within the presidential administration.

Putin also raised Defense Minister Sergei Ivanov’s profile in the cabinet, appointing him a deputy prime minister with responsibility for the security agencies and defense industries. As defense minister Ivanov has strongly backed plans to increase spending to develop the Kuril Islands. In particular, he has suggested that the Russian defense ministry should have a right to control the development of the local infrastructure (see EDM, October 18).

In October the Russian government approved a blueprint to develop the Kuril Islands through 2015 and pledged to invest more than 15 billion rubles ($526 million) in the Kurils in the next decade. In 2006, the government promised to allocate 2.5 billion rubles ($88 million), up roughly six times from some 400 million rubles ($14 million) this year. Ivanov’s appointment as deputy prime minister could help ensure that these plans materialize.

Putin also dismissed Konstantin Pulikovsky, his special envoy to the Far Eastern Federal District, which included the disputed Kuril Islands. Last August, Pulikovsky insisted, “Russia does not have any problem with the Kuril Islands.” Relations between Russia and Japan are good enough even without a peace treaty, he maintained. In the meantime, the Kuril Islands are set to become “a beautiful corner of the prosperous Russia,” Pulikovsky said.

Also in August Pulikovsky reportedly nominated Russia’s third-richest man, Viktor Vekselberg, a stockholder in the TNK-BP oil company and aluminum producer SuAl, as the next governor of Kamchatka. However, the Kremlin apparently dismissed the proposal, thus undermining Pulikovsky’s clout in the region.

Pulikovsky is considered to be Russia’s leading expert on North Korea and its mercurial leader, Kim Jong-il. The retired general had accompanied Pyongyang’s reclusive “Dear Leader” on his train rides to Russia and wrote a book that reveals details of these trips. Among other things, Pulikovsky claimed, “Kim Jong-il radiated strong personal energy.”

Russia, which borders North Korea near Vladivostok, has sharply downgraded its ties with North Korea in the past decade. Moscow and Pyongyang have signed a new bilateral treaty to replace an outmoded Soviet-era accord in place since 1961. However, bilateral trade turnover has been below $100 million in the past few years. The decline has been blamed mainly on North Korea’s economic crisis and its unpaid debts to Russia. Yet despite good personal ties between Pulikovsky and Kim Jong-il, economic ties between the Russian Far East and North Korea have failed to increase.

Putin replaced Pulikovsky with Kazan Mayor Kamil Iskhakov, who immediately pledged to prioritize raising the standard of living for the people who live in Russia’s Far Eastern regions. “There is a lot of work to be done as living standards there require significant improvement,” he said. Iskhakov promised to develop cooperation between the Far East and Tatarstan in the oil and petrochemical sectors. He also pledged to sustain the Russian Far East’s accomplishments in relations with neighboring states (RIA-Novosti, November 15).

Local elites greeted Iskhakov’s surprise appointment with some reservations. Oleg Turkovpo, head of the Amur regional legislature, described the Iskhakov appointment as a major surprise but pledged to work with him. I “hope there will be no major problems with the new envoy,” Turkovpo said. However, he also expressed concerns that Pulikovsky’s earlier promises of economic aid for Amur region now may not be fulfilled (Regnum, November 15).

Iskhakov’s appointment was also seen as having an agenda unrelated to the Russian Far East. Iskhakov has been given a trial run in a federal job to prepare him for succeeding Tatar President Mintimir Shaimiev, said Natalya Menshenina, head of the Pacific Institute of Politics and Law (Regnum, November 15). It remains to be seen whether Iskhakov could manage to deliver on his pledges to give the region’s economic development a much-needed boost.