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Going Rogue

Former Finance Minister Aleksei Kudrin
Former Finance Minister Aleksei Kudrin
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Well, so much for the hopes that an answer to the 2012 question would put an end to political uncertainty in Russia.

Finance Minister Aleksei Kudrin resigned today, just hours after a testy public exchange with President Dmitry Medvedev.

Apparently the switcheroo announced at the United Russia congress on Saturday -- with Vladimir Putin becoming president in 2012 and Medvedev becoming prime minister -- doesn't suit Finance Minister Aleksei Kudrin.

Speaking to reporters in Washington on Sunday, Kudrin, a key member of Putin's inner circle who is widely credited with orchestrating Russia's macroeconomic stability, says he would not serve in a Cabinet led by Medvedev.

Kudrin's stated reason was that he opposed Medvedev's plans to increase military spending by $65 billion over the next three years. But there appears to be more to it than that. Many Kremlin-watchers, in fact, had expected that Kudrin would be named prime minister in the event that Putin returned as president. Instead, Medvedev got the nod.

Back in Russia today, Medvedev told Kudrin at a meeting of his modernization commission that Kudrin should just resign now.

Here's the exchange:

Medvedev: "If you, Aleksei Leonidovich, disagree with the president's policy -- and the government implements the president's policy -- then you have only one option, and you know it: to resign."

Kudrin: "I will make my decision about your proposal after consulting with the prime minister."

Medvedev: "You know what, you can consult with the prime minister or whoever you want, but as long as I'm president I make such decisions myself. You are going to have to decide...

Kudrin: "Of course."

Medvedev: Decide quickly, and give me your answer before the end of the day. Anyone who doubts the policy of the president or the government, anyone who has other life plans, is free to submit their resignation to me. But they should do it openly. I'm going to put a stop to any irresponsible jabber. And I'm going to be making all the necessary decisions up until May 7 next year."

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There are various rumors swirling about what happens next. Kudrin could end up as Central Bank chairman according to one scenario. In another, Medvedev will carry out deeply unpopular social reforms after the presidential elections, take the heat, become the fall guy, and resign to become chairman of the Constitutional Court. Kudrin would then step in as prime minister.

Whatever happens, I don't expect Kudrin to be too far from the circles of power anytime soon. He is very close to Putin (he is rumored to be the only official allowed to use the familiar "ty" with Putin in private conversations) and he is widely considered to be a top flight professional and one of the most valuable members of the ruling elite.

He has weathered several attempts to remove him, most recently following the 2008 financial crisis when Deputy Prime Minister Igor Sechin tried to force him out but was thwarted by Putin's intervention.

Putin has not spoken publicly on Kudrin's conflict with Medvedev as of the time I am writing this.

What the events of the past couple days seems to illustrate is that the ruling elite was thrown off kilter by the Putin-Medvedev 2012 decision. Some were disillusioned by Putin's plan to return to the presidency. Others by the fact that Medvedev -- and not Kudrin -- would be prime minister. Some by both.

It's not clear where this is going, but we'll keep a close eye on it in the days and weeks ahead.

-- Brian Whitmore

Tags: Vladimir Putin, Dmitry Medvedev, Aleksei Kudrin

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by: La Russophobe from: USA
September 27, 2011 13:10
Why do you think it matters in the least what Kudrin does? Markets did not care, S&P did not care, only the weird Kremlinologist set cared, the same ones who thought Putin might not return to power. It is a non-issue. Only one man matters now in Russia, just as in the time of Stalin.

About This Blog

The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It covers emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or

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