Publication: Prism Volume: 7 Issue: 1

By Elena Dikun

The bitter tussle surrounding the restructuring of Unified Energy Systems (UES) at the end of last year and reports of an imminent government reshuffle may be seen as the first public signs of a battle between the Kremlin and the White House which has been going on behind the scenes for some time now.

No one in the government expected that the Christmas festivities would be followed once again by reshuffles, a redistribution of powers, more promotions and demotions, renaming of posts and salary reviews. All the signs were that this was as much of a surprise for the prime minister who announced the changes as it was for his subordinates. Just a month ago, when replying to questions from the newspaper Vedomosti about whether any changes were expected in the cabinet, Mikhail Kasyanov said confidently: “We need to work for at least a year in order to take a good look at the structure of the government, to see how efficient government is within this particular structure.” But it suddenly emerged that there was no need to look any further: The structure needed changing urgently. Enlightenment dawned on the prime minister from above, of course–from the Kremlin. Before leaving for Cuba, Vladimir Putin asked Kasyanov to think about a new structure for the government.

Meanwhile, information at our disposal suggests that the president’s chief of staff Aleksandr Voloshin and economics adviser Andrei Illarionov are drawing up a plan for the reorganization of the government. Kasyanov is very much at their beck and call. The prime minister’s people do not yet know who was behind the idea–whether it was Voloshin and Illarionov or whether Putin put them up to it–but they concede that the groundwork for the attack on the government was laid very skillfully and effectively by the chief of staff and economic adviser. This is a reference to earlier revelations of plotting by Anatoly Chubais, who had allegedly pushed through cabinet a plan for the restructuring of UES which had not been approved by the president. Voloshin angrily called Chubais a swindler, and although the accusation was directed at the energy boss, the prime minister’s image was also tarnished: In effect, either Kasyanov was in cahoots with Chubais, or he knew nothing of Putin’s reprimand.

However, government officials swear that in fact there was not and could not have been any plotting. On the eve of the ill-fated government meeting to discuss UES, the protagonists of the subsequent scandal–Kasyanov, Voloshin and Chubais–saw Putin off on his trip to Cuba and agreed all the necessary changes at the airport. The fact that these oral agreements were not put down in writing is straightforward clerical negligence. Yet the president’s administration inflated the affair to make it look like grand political provocation. Why?

“Voloshin was presented with an opportunity to show who’s boss in the country when the president’s abroad,” a senior government official said, “that’s all there is to it.” But just a few days later, the White House was informed of the imminent restructuring, and it was then realization dawned that the plans of the president’s team were much more far-reaching. It is unlikely that the cabinet will be given a radical new look, but a redistribution of spheres of influence is inevitable. As to who will benefit most from this rearrangement, evidently only the rearrangers know.

As yet little is known about the forthcoming reorganization. Kasyanov has announced that the workload of the deputy prime ministers needs to be lightened and the role of ministers enhanced. To put it more simply, it is planned to divest individual vice premiers of their ministerial portfolios.

An alternative theory is doing the rounds: The role of ministers will be enhanced by reducing the number of deputy prime ministers to one. There are also various predictions as to who will be sidelined and who will be promoted.

Version 1: Kasyanov’s position will be strengthened at the expense of Vice Premier Kudrin.

Only two of Kasyanov’s deputies are also ministers: Aleksei Kudrin runs the finance ministry, and Aleksei Gordeev is in charge of agriculture. Given that the Gordeev’s role and status does not give anyone any cause for concern at all, it follows that any lightening of the vice premiers’ load will come at Kudrin’s expense.

It should not be forgotten that Kudrin’s predecessors, Boris Fedorov, Aleksandr Livshits and Mikhail Zadornov, were all categorically opposed to separating the portfolios of vice premier and minister of finance, because this would have stripped them of real power. Nor will Aleksei Kudrin be at all happy with the idea. If it does happen, it means that Kudrin is being punished. This may be because, as the papers are reporting, he is plotting against Kasyanov, or has fallen out with Kremlin businessmen Abramovich and Mamut, or has failed to secure victory in the tax wars against the oil barons, or even simply is from St. Petersburg (the indigenous Muscovites are going to have to stand up to St. Petersburg expansionism at some point).

The vice premier’s entourage have tended to pin their hopes on Putin’s friendly attitude towards Kudrin: He is constantly inviting him to meetings at the Kremlin, over the prime minister’s head. But in politics there are circumstances which are stronger than friendship.

During his press conference summing up his government’s achievements over the last year, Kasyanov made no mention of the 2001 budget, which was the central achievement and source of pride of Kudrin’s department. Such omissions are not coincidental. The vice premier’s team decided that this was a warning shot.

Version 2: Kasyanov’s position will be weakened by the appointment of a single deputy.

Aleksei Kudrin may indeed lose the finance ministry and become “purely” deputy prime minister. But he won’t be an ordinary vice premier–he’ll be the only one, “almost prime minister”. This will be another example of two-headed government, familiar from the Stepashin-Aksenenko act. Moreover, Kudrin may not necessarily take Aksenenko’s role, though the prospects of the other candidates–telecommunications minister Leonid Reiman, economy minister German Gref and vice premier Ilya Klebanov–are rather less attractive.

Kasyanov secured the job of prime minister in recognition of his success in negotiations with foreign creditors. However, at the CIS summit in Minsk in early December Putin offered a radical reassessment of this success, detecting in it clear signs of bungling. He would hardly have done this if he did not want to hurt his prime minister.

Additionally, Kasyanov may have fallen out of favor due to the way he avoided confrontation with the oil industrialists for a whole six months, and even protected them from the attacks of his deputy Kudrin in the final set-to. Recently Kasyanov has been holding talks to exchange part of Russia’s foreign debt for shares in top Russian companies. This initiative puts the prime minister’s political reputation at risk and has been criticized by the president’s adviser Illarionov. Lastly, Kasyanov still tends to be seen as a creature of Berezovsky and the Family. This alone may be enough to warrant carefully maneuvering more reliable people in front of him. Clearly, changes in the fortunes of such key figures as Kasyanov and Kudrin will set off a whole series of changes in personnel. By the same token, the selection of any given scenario for reorganizing the government will also be the result of a battle involving all influence groups. And it will be the first nationwide review of forces since Putin’s election.

Elena Dikun is a political columnist with Obshchaya gazeta.