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Kudrin pays price for going off script
By Timothy Heritage
Published in The Saudi Gazette on 28 - 09 - 2011


Reuters
Vladimir Putin's strategy for a smooth return to the Kremlin appears to have gone off script with the departure of Finance Minister Alexei Kudrin.
The removal of such a trusted ally on Monday is unlikely to have been part of Putin's plan when he announced on Saturday that he wanted to reclaim the presidency in an election next March after nearly four years as prime minister.
Although nothing can be taken for granted in Russia's Byzantine political system, feuds like the one that broke out between Kudrin and President Dmitry Medvedev are rare at such a high level, pointing to personal rivalries as much as the differences they cited over policy.
The revolt opened up cracks in the unity that Putin and Medvedev had portrayed in their plan, but there is no sign of anyone else dissenting in the upper echelons of power and Kudrin's removal is intended to deter any further resistance.
“Experience with Putin's Russia suggests that most political events are closely ‘managed' ... That said, I find it difficult to imagine that the manner of Kudrin's departure fits into a managed script,” said Tim Ash, emerging market economist at Royal Bank of Scotland.
“It is difficult to conceive that the administration would have wanted to have lost its most trusted and capable economic manager. This is all very un-Putin like, and seems something of an own goal.”
Putin, 58, and Kudrin, 50, have been allies since they worked together in the St Petersburg city authorities in the 1990s. Kudrin helped bring Putin to the Kremlin administration and Putin appointed his ally as finance minister in 2000.
Foreign investors saw Kudrin as the person most likely to carry out far-reaching economic reforms in the next government even though he has shown financial prudence rather than tackling reforms in 11 years as finance minister.
There is no obvious successor to Kudrin as finance minister and Western economists' unanimous presentation of his departure as bad for Russia's economy is hardly a scenario Putin would have welcomed.
Cliff Kupchan of the Eurasia group, a US-based consultancy, said Kudrin's removal “threw a wrench into the plan when he resigned under pressure from Medvedev.”
Kudrin may have been driven by personal ambition after dropping hints that he had little interest in continuing as finance minister and wanted to be prime minister.
He may also have concluded that whoever is the next prime minister could quickly be made a scapegoat if he or she takes on the tough challenges of overhauling the pension system and reducing Russia's reliance on energy revenues.
“Most Moscow insiders believe Kudrin will resurface in a position close to Putin, as the two are very close,” Kupchan said.
“The Kudrin episode does suggest Putin did not have all his ducks in a row before making his plan public, but if there are no further fractures among the elite and Kudrin resurfaces, the damage will probably be limited.”
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