MOSCOW – When a man runs for the office of Russian prime minister, he must first learn to crawl.
Former prime minister Mikhail Kasyanov mistakenly imagined he was on a high horse, when in early October he received a delegation from United States oil company ExxonMobil and allowed his guests to announce publicly that the Russian government could find no obstacle to their acquisition of a strategic stake in YukosSibneft, Russia’s principal oil producer.
That put him on the wrong side of President Vladimir Putin at the very moment when Putin decided to make the fight of his career, arresting and jailing Mikhail Khodorkovsky, forcing chief of staff Alexander Voloshin into the cold, and deciding there will be no sales or share swaps of Russia’s strategic natural resources to foreign corporations.
If Kasyanov had any hope of retaining the prime minister’s portfolio after the parliamentary elections on December 7, or the presidential poll next March, he appeared to have lost it when, his eyes askance, he was obliged by Putin to listen to a blunt warning to the entire cabinet to stay out of the Yukos affair. Kasyanov’s exit became a certainty when on Halloween he publicly attacked the court-ordered freeze of the 44-percent bloc of Yukos shares that Khodorkovsky and his allies control.
By contrast, the three economic policy ministers in the cabinet, which Putin inherited from ex-President Boris Yeltsin in 1999, quickly understood that the ExxonMobil deal was impossible, and Khodorkovsky insupportable. German Gref, minister of economic development and trade, appeared by Putin’s side when the president met with a group of investment bankers.
Since the Yukos affair began, Gref and Victor Khristenko, the deputy prime minister in charge of the oil sector, have become timid advocates of a new tax, licensing and anti-trust regime for natural resources that should eliminate the oligarchs as the dominant force in the Russian economy. Timidity is the sound a man lacking confidence makes when he is on all-fours.
It has been Alexei Kudrin, the finance minister and deputy prime minister in charge of macro-economic policy, however, who has made the loudest virtue of that deportment. In defending the president from that posture, he has appealed for selection as Kasyanov’s successor, Russia’s new prime minister. A one-time protege of Anatoly Chubais, Kudrin learned early how to run and crawl at the same time. Responding to the exit of Voloshin from the Kremlin, he declared that “this marks the end of the Byzantine empire!” as if Kudrin’s humble service in Byzantium all these years has been nothing if not dutiful, selfless, and unflinching in his resistance to bad policy.
“Of course, we will close that tax avoidance loophole, pay wages, and reduce taxes,” proclaimed Kudrin, once he had been convinced by Putin himself that there was no reversing course in the clash with Khodorkovsky. “But it never ceases to amaze me why a far-from-impoverished oil company should crave those loopholes so vehemently.” Irony is usually not a quality favored in Russian prime ministers, as it doesn’t comport well with unswerving loyalty, and the ability to accommodate contradictions – two higher qualities for the job.
How will Kudrin’s new support for the restructuring of the Yukos shareholding, and for an end to tax privileges for oil companies, lead him to treat the tolling privilege in aluminum, which Kudrin conceded in favor of Oleg Deripaska and Victor Vexelberg; or the privatization of Alrosa, which Kudrin has been tempted to give away to the President of the Sakha republic; or the declassification of metals secrets which he awarded to lobbyists from Vladimir Potanin, enabling him to prepare to place his shares in Norilsk Nickel on the international market?
These are only a few of the policy contradictions over which Kudrin has presided at the Finance Ministry until now. But they are potentially serious vulnerabilities in his campaign to win Putin’s favor for the next prime minister, if they prove that Kudrin’s loyalty has been too easily swayed by either foreign economic interests in Russia, or the oligarchs. Sergei Stepashin, the current head of the Accounting Chamber and briefly one of Yeltsin’s prime ministers, is a contender who can lay claim to greater independence.
Stepashin even attempted to direct his auditors into the Finance Ministry itself, which Kudrin has preserved from any of the accountability or public sector reform he has urged everywhere else in the government bureaucracy. That ex-President Yeltsin should go to great lengths to publicly belittle Stepashin, and simultaneously promote Chubais – published in an interview with the newspaper that Khodorkovsky recently acquired – is a strong signal of what Yeltsin (and Chubais) fears may happen in the prime ministry soon.
“It is not that he had some shortcomings,” Yeltsin recently said of Stepashin. “He is a talented and well-educated person. It was just that he did not have all it takes to be prime minister and then become president.” What that meant in 1999 was clear – Stepashin was too great a risk to Yeltsin and the interests of his cronies. Now, and in the second Putin term, that may be just what Putin needs in order to run a government fully free of the Yeltsin group’s influence.
Another contender, Vladimir Litvinenko, is possibly the most influential of the Kremlin’s advisors on natural resource policy, and the most modest. As rector of the St Petersburg Mining Institute, and one of Russia’s leading academics on resource policy, he has been biding his time and nurturing the president’s understanding of how to manage Russia’s resource wealth.
If Litvinenko is chosen as prime minister, or as a super-minister for natural resources, this would be a signal that the cash flow methods and investment priorities of the oligarchs who will remain after Khodorkovsky’s case is over will not endure either.
Neither Stepashin nor Litvinenko is the sort of character who will crawl for public office. Whether they are running is up to Putin to decide. His decision may already have been taken.