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Russia's PM Medvedev Is on His Way out, But Who Will Succeed Him?

Defense Minister Shoigu, Foreign Minister Lavrov, and especially, the liberal financial guru Kudrin are all in the running

This is part two to yesteday's headline Time Is Running out for Russia's Prime Minister Medvedev

Among the possible candidates to succeed Medvedev in the Russian White House include Defense Minister Sergei Shoigu, whose plusses include his broad popularity among Russians, his experience in a high state office dealing with domestic policy, in particular the Emergency Situations Ministry, which deals with the results of natural catastrophes and the like, and his experience in foreign and security policy acquired as Defense Minister.

State Duma Chairman and former Presidential Administration Deputy Chief in charge of domestic policy and politics Vyacheslav Volodin is another possible candidate. Although Volodin has deep domestic policy experience, his only serious foreign policy contact has been indirect through his presence in the Presidential Administration and since becoming Duma Chairman as a member of the Security Council.

Moscow Mayor Sergei Sobyanin is another potential candidate to replace Medvedev as is Foreign Minister Sergei Lavrov, who is a very accomplished diplomat and foreign policy operative and very much respected by Putin.

Sobyanin’s lack of foreign policy experience and Lavrov’s lack of domestic political credentials damage these potential candidacies significantly. Each would need a new appointment into the issue areas where they are lacking in order to be considered front runners.

The problem with the above short list is that it lacks a Petersburger, whom Putin has always relied on in key positions since consolidating power. More importantly, it lacks someone with broad experience in Russia’s economy and finances.

Putin increasingly sees the office of prime minister and other executive posts, such as regional governors, as technical administrative positions rather than political ones.

Such offices should be occupied by ‘technocrats’ with economic and socioeconomic perspective and administrative experience.

In addition, even under Putin the prime minister’s chair and the government’s economic and financial ministries and agencies have typically been held by liberals, always economic liberals, often political liberals: Medvedev, Kudrin, Gref, Artyomov, Nabibullina, etc.

Thus, it is likely the government will be headed in Putin’s fourth term by a liberal of either sort. Shoigu is no liberal and an economic novice. Volodin is an economic novice as well and politically he promised liberalization but for the most part tightened the screws for Putin after Medvedev’s liberalization of the election system in 2012 in response to the December 2011 protests. Lavrov has no domestic political record, political or economic.

If Medvedev’s days are numbered, then the top candidates from the liberal perspective are Kudrin, and perhaps Andrei Belousov. Kudrin is Russia’s financial guru, and Putin recognizes that.

The Russian economy was able to tread water and is slowly recovering on the back of the reserve funds and general financial strength of the state fostered by Kudrin as Finance Minister.

Kudrin’s other advantage over the others is he is a Petersburger, though not a member of the Petersburg siloviki circle or Putin’s Ozero close associates. To the contrary, he is likely seen by these elements to be an opponent, given his liberal political and economic views.

Putin clearly has great respect for Kudrin’s policy chops, given his repeated appointment of Kudrin to offices giving him access to Putin, including in 2015 to head the Center Strategic Development (CSD) and the presidential group drafting a 2018 economic strategy for Putin.

These votes of presidential trust in Kudrin came despite his semi-defection from the regime in September 2011 after it was announced Putin would be running for the presidency. Kudrin then sought to mediate between the regime and opposition, and made and continues to make calls for free and fair elections, a general political liberalization, and greater rule of law.

Belousov is Putin’s presidential economic assistant and a close associate of the Stolypin Club and of Putin’s business ombudsman, Boris Titov. Belousov and Titov are more economic statists than liberals; something along the lines of the U.S. Democratic Party’s Keynesianism as opposed to Kudrin’s more Republican-style laissez faireism.

Belousov is an academic and policy geek, with no political record or even party affiliation, no less any credentials as a political reformer. He worked in several Russian economics-oriented think tanks until 2006 when he began working under Putin and Medvedev in various capacities: the Medvedev government’s Deputy Minister of Economics and Trade, 2006-2008; Director of Economics and Finance Department of Prime Minister Medvedev’s central governmental apparatus, 2008-2012; Medvedev’s Economic Development Minister, May 2012 – June 2013; and assistant to President Putin, June 2013-present.

After Putin asked Kudrin and the CSD to develop an economic development strategy for his expected fourth presidential term, he then asked Belousov to draw up an alternative to the Kudrin plan.

The resulting Stolypin Club’s ‘Strategy for Growth’ or Belousov-Titov plan proposes creating a breakthrough to 4 percent annual economic growth by stimulating investment by flooding the economy with budget funds and Central Bank emissions along the lines of the Obama administration’s ‘shovel-ready’ projects and QEs .

Kudrin proposes a gradual approach based on private rather than state investments to stimulate growth. The government’s role should be confined to creating the conditions that will spur private investment: securing macroeconomic stability, keeping inflation low by eschewing currency emissions, lowering budget deficits, and carrying out structural reform.

Medvedev and Kudrin are known not to get along. During the 2006-2102 period Belousov and Kudrin also clashed, since Belousov was working in the Economic Development Ministry, which, though liberal by Russian standards, preferred Keynesian stimulus methods antithetical to Kudrin’s strict monetary and budget policies and attempt to build up Russia’s sovereign and reserve funds.

The recent hiring of liberal statist Sergey Kirienko as Volodin’s replacement in the presidential Administration and Kirienko’s growing role in domestic political management could suggest a drift more in the direction of Kudrin than Belousov.

Although Putin’s recent legislation authorizing the distribution of land in the Far East to Russians for free echoes liberal statist Imperial Russian Prime Minister Pyotr Stolypin’s policy of doing the same more universally, it does not signify a reliance on the Stolypin Club.

To the contrary, this economic innovation — so uncharacteristic for Putin — reflects the Russian president’s growing awareness and concern that the Russian economy as policy stands now is doomed to stagnate and therefore lag behind the other great powers.

But Kudrin might be reluctant to join a Putin administration that could become increasingly besieged by popular discontent should it fail to address the political and legal reforms Kudrin prefers.

It is unlikely that Putin would undertake political liberalization without being nudged or forced, and at present neither do circumstances nudge nor can the opposition force Putin to move in that direction.

Putin will demand guarantees that Kudrin will restrict himself to economic policy not just in deed but in his words. Otherwise, there is no reason for him not to select Belousov or someone of his ilk but with liberal credentials, such as Titov or even Kirienko, to replace Medvedev in May 2018.

An artificially technocratic Kudrin could become the stealth leader of any counter-elite forming in Moscow and the regions. Putin cannot risk the formation of a pro-democracy counter-elite within the state apparatus, something that could lead to a regime split and revolution from above or some other mode of regime transformation that excludes him.

On the other hand, like Belousov, Titov and Kirienko, Kudrin seems to lack the charisma necessary to be able to lead a political challenge to Putin.

He also proved able to refrain from all politics during his more than 11-year tenure as Putin’s Finance Minister. His experience, Putin’s trust in him, and his status as the alternative to the increasingly discredited Medvedev, all make Kudrin the frontrunner.

Powerful hardline forces are gathering to forestall such a possibility, but Putin’s practice has been to balance countering philosophies and clans.

So if Putin decides to terminate the tandem in the next year, he may very well opt for the liberal Kudrin, as he did in 2007 when he looked past the conservative Sergei Ivanov and tapped the liberal Medvedev as his temporary successor in the Kremlin.

Source: Russian and Eurasian Politics

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