Tuesday, 2 October 2007

Speculation mounts about Putin’s successor

Financial News

Jason Corcoran

01 Oct 2007

Letter from Moscow
Huge billboards bearing the slogan “Putin’s Plan – Russia’s Victory” against the background of the Russian flag have been sprouting up all over Moscow during the past month.

While the signs do not carry the slogan of any political group, they are believed be a subliminal message from the United Russia party, a strong backer of President Vladimir Putin.

The mystery behind the advertising campaign has tickled the curiosity of Russia’s blogosphere. One blogger thought it referred to Putin’s involvement in Sochi’s winning bid for the 2014 Winter Olympics; another said it hinted at Putin’s secret blueprint for reforming the former USSR; it reminded another user of slogans from Brezhnev’s Soviet era.

Whatever the message’s meaning, it is clear the Kremlin is in election mode and gearing up for the parliamentary contest on December 2 and the presidential elections in March.

Putin last week appointed a new cabinet charged with preparing the country for election. There was no purge of cabinet members – only three ministers made way for new blood. Economics Minister German Gref, who had indicated his wish to move into the private sector, was replaced by his former deputy Elvira Nabiullina.

The criticised Minister for Health Mikhail Zurabov was replaced by former Deputy Finance Minister Tatiana Golikova, while Regional Development Minister Vladimir Yakovlev made way for Putin ally Dmitry Kozak.

Ministers believed to be on shaky ground, including Deputy Prime Minister Dmitry Medvedev and Finance Minister Alexei Kudrin, retained their roles, with the latter promoted to rank of Deputy Prime Minister.

Kudrin, a liberal economic reformer, is the biggest winner in the reshuffle. One of his main tasks is to structure the growing stabilisation fund. Both he and Gref clashed with Putin this year about how Russia should spend its oil wealth.

The two have been pushing for the creation of a reserve fund similar to Norway’s state pension fund with a mandate to invest in foreign securities. Putin raised the prospect of using the windfall to support ailing domestic blue-chip companies, a move that analysts said could lead to the economy overheating.

Gref – an outspoken critic of the state champion energy model – might have been squeezed out for failing to secure Russia’s membership of the World Trade Organisation.

Moscow’s investors agree the changes strengthened the hand of the cabinet’s reform faction in spite of Gref’s departure.

The new cabinet is also striking for its number of family ties. Prime Minister Zubkov is the Defence Minister’s father-in-law, the new Energy Minister Golikova is the Health Minister’s husband, and the Justice Minister’s son is married to the deputy Kremlin chief of staff’s daughter.

The naming of new government comes a week after Viktor Zubkov, an obscure technocrat who had overseen money laundering investigation, became Prime Minister in a move that surprised most Kremlinologists and stoked speculation about Putin’s successor.

Putin, himself plucked from obscurity by former President Boris Yeltsin, suggested Zubkov could be a contender to take over when he steps down. Zubkov, a one-time farmer in a St Petersburg collective, has been playing up his chances of taking the top job just two weeks into his premiership.

Analysts say the reshuffle has also thrust Development Minister Kozak into the limelight as a potential contender with front-runners Deputy Prime Minister Sergei Ivanov and Medvedev.

Ultimately, the political changes did nothing to dent investor sentiment and much to increase confusion about who will follow Putin as President.


No comments: