A Shuffle in High Places
Russian President Vladimir Putin yesterday appointed Deputy Prime Minister and Defense Minister Sergey Ivanov first deputy prime minister in charge of the military-industrial complex and “part of the civilian sector of the economy.” The new defense minister is head of the Federal Tax Service Anatoly Serdyukov, an entirely civilian official. Chief of the administration staff Sergey Naryshkin was appointed deputy prime minister for foreign trade. Ivanov and Dmitry Medvedev now have equal opportunities to promote themselves as potential successors to the president, while all the day-to-day work of the government will be borne by Naryshkin.
The president stated that the appointment of Sergey Ivanov to a new office was necessary “to give the Russian economy a more innovative character,” adding that Ivanov would “in addition to the military-industrial complex, coordinate part of the civilian sector of the economy.”
Rumors have been circulating for a long time in the Defense Ministry that Ivanov would be departing for a higher office, even though Ivanov himself told journalists at the beginning of 2004 that he intended to work in ministry until 2008 “in order to achieve some perceptible result here.” Recently, those rumors grew into certainty. On February 27, the minister was supposed to travel to the Middle East, but preparations for the trip had been practically called off. They had assumed at the ministry, however, that the minister's promotion would be timed to Homeland Defenders' Day, February 23.
Ivanov handled much more than just the military as deputy prime minister. He was in charge of the formation of the United Aircraft Building Corp. from enterprises making both military and civil aircraft. The civilian work of the Naval College, which is headed by Ivanov, was also notable, particularly its involvement in the development of the continental shelf. After a number of air disasters, the president assigned Ivanov to find a broad solution to air safety problems.
For Ivanov himself, the new appointment is important not only for what he will be responsible for now, but also what he will be no longer be tied to. His departure from the Defense Ministry rids Ivanov of an array of problems that had seriously darkened his presidential perspectives. The successes of the defense sector under Ivanov are offset by “negative phenomena” such as the Sychev case, which arise regularly in the army he heads. Now all the unpleasant questions about mutilated recruits, sinking submarines and exploding rockets will fall on new civilian Defense Minister Anatoly Serdyukov. Ivanov will be able to concentrate fully on forming a rosy public image of himself as the creator of an “innovative” Russian economy.
Ivanov's new status of first deputy prime minister should give him full equality in the eyes of the voters with the other potential successor, First Deputy Prime Minster Dmitry Medvedev. A high-placed member of the presidential executive staff told Kommersant when asked whether Ivanov's new appointment was a promotion or a demotion that “it was not just a promotion. It was the broadening of all horizons.”
Chief of the administration staff Sergey Naryshkin's appointment as deputy prime minister took place in his absence. Yesterday, he was in Paris making preparations for the deputy prime minister's visit there. Putin made it known that the appointment was a reward for the absent official. He was “promoted to the level of deputy prime minister,” the president said.
The president's explanation for the appointments was indirect – a courtesy to Prime Minister Mikhail Fradkov. Formally, Naryshkin will be in charge of “issues of foreign trade, particularly cooperation with CIS countries.” The prime minister several times last year urged that foreign trade receive greater emphasis in the administration, even favoring the reestablishment of a ministry of foreign trade. Theoretically, Fradkov got what he wanted and more. There is now a deputy prime minister to attend to the matters that Fradkov handled when he was a minister. But Naryshkin is unlikely to limit himself to foreign trade. His role in the administration has long been larger than that.
The presence of two first deputy prime ministers and two deputy prime ministers changes the management structure of the administration. The lion's share of the internal work of the administration falls to Deputy Prime Ministers Alexander Zhukov and Naryshkin. They handle the most disputed issues that regulate relations between the prime minister, the power agencies, the presidential administration and the economic bloc in the administration, that is, Finance Minister Alexey Kudrin and Minister of Economic Development and Trade German Gref.
The list of areas Naryshkin has been involved in as chief of the administration staff in the last six months is impressive. He took part in dividing authority between the customs service and Economics Ministry, problems related to the privatization of Svyazinvest, conciliation of legislation to limit foreign investment in strategic sectors of the economy (he has yet to achieve a compromise on it between the Economics Ministry, Ministry of Industry and Energy and FSB though), enforcement of administration regulations and a number of issues involving Rosneft, where is he on the board of directors.
Naryshkin will clearly be the second most influential official in the administration with his new appointment. Kommersant has learned that it has been decided he will practically occupy both posts, deputy prime minister and head of the administration staff, simultaneously. “There is no other candidate for that position,” a source in the administration commented yesterday. It is not yet known how Naryshkin and Zhukov will split their unofficial authority. Formally, they will have equal status, but Naryshkin has in reality overtaken his formerly more influential colleague. One way or another, the day-to-day work of the administration depend on the two deputy prime ministers and the prime minister. Because of the changes in his administration, Fradkov returned to Moscow from Ashgabat two hours earlier than planned and went to the Kremlin directly from the airport. There, a practically new administration had been formed, just as he had suggested to the president on February 2.
A source close to Fradkov told Kommersant that, with the president's actions, the prime minister's plans for the formation of his cabinet are beginning to take shape. Fradkov clearly intends to take advantage of the situation and remake the cabinet in the coming months. The presence of two first deputy prime ministers who obviously have political influence comparable with the prime minister's makes the undertaking more dramatic and less predictable.
So far, all that is known is that, under Ivanov, which, in the strict interpretation of the words of the president yesterday, the economy may have new, innovative opportunities for growth on the base of the military-industrial complex. An administration source commented that an “industrial bloc” will be formed in the administration, Minister Khristenko will be under Ivanov's supervision and that his ministry may be divided into two parts, with a Ministry of Industry under Ivanov and a Ministry of Energy under Fradkov.
The process of dividing up influence over the rest of the ministries will most likely determine the alignment of forces in the pre-election cabinet of 2007-2008. Two scenarios can be suggested. In the first scenario, Ivanov and Medvedev will form two discrete blocs in the administration, Medvedev's socio-economic bloc, to which the Ministries of Health and Social Development, Culture and Regional Development in practice already belong; and a military-industrial bloc made up of the Ministry of Industry and Energy, the power agencies and the Transportation Ministry. In the other scenario, the undivided ministries – the Finance Ministry, Economics Ministry and Ministry of Natural Resources, form a third power that could represent Naryshkin in the administration and continue the advance of his career.
It seems likely that the fine tuning of the cabinet has only begun and will increase in its scope. Fradkov's concept for changes in the structure of the ministries may be implemented in the next two months. Personnel changes may affect not only the administration but, as a source close to the presidential executive staff told Kommersant, his agency, the Audit Chamber (allegedly presidential representative in the Southern Federal District Dmitry Kozak may replace Sergey Stepashin as its head) and the power agencies. This spring, the Russian authorities may have a completely different makeup, with new views on the 2008 presidential election.
Dmitry Butrin, Petr Netreba, Maxim Shishkin
All the Article in Russian as of Feb. 16, 2007
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