Russia's New Government Reflects Putin's Priorities

4 MINS READMay 21, 2012 | 15:54 GMT
Russian President Vladimir Putin (L) with Prime Minister Dmitri Medvedev at the Kremlin in Moscow on May 15

Russian President Vladimir Putin unveiled a new government May 21. Most of the officials in the new government have served under Putin and his loyal successor, Prime Minister Dmitri Medvedev. However, a few changes in the Kremlin lineup show what Putin means to focus on during his third term as president: the economy, the energy sector and the regions.

Before negotiations for the new government began, the Kremlin's two key clans — the security-oriented siloviki and economically liberal civiliki — were fighting over several policy issues. Traditionally, the siloviki have had the upper hand in the government by either holding many of the Cabinet positions or allying with Cabinet incumbents, allowing the siloviki to stifle the civiliki's agenda and focus instead on security issues. There was some concern that the routine post-election government reshuffle would reignite infighting that would paralyze the Kremlin, much like it did in 2004.

However, the formation of the new government did not prompt a dramatic change, as did previous reshuffles. Many officials have kept their positions, including Russian Foreign Minister Sergei Lavrov, First Deputy Prime Minister Igor Shuvalov, Defense Minister Anatoly Serdyukov and Finance Minister Anton Siluanov. However, some notable changes show that Putin's priorities are shifting for his third presidency term.

The first shift can be seen in Putin's choices of Arkady Dvorkovich as deputy prime minister and Andrei Belousov as economy minister. Dvorkovich is a long-time adviser to the Kremlin on financial and economic matters and is a strong proponent of modernizing and liberalizing the economy with foreign investment. Russia has been struggling with its plans to modernize and privatize its economy, and Dvorkovich — who has strong ties to Western financial and economic circles — represents a strong push to get those plans back on track. Belousov was one of the architects of the modernization and privatization programs and can be expected to work with Dvorkovich to reach the programs' goals.

The second shift is in the realm of energy. Energy chief Igor Sechin was replaced as deputy prime minister and Alexander Novak was appointed as the new energy minister. Sechin is considered the leader of the siloviki in the Kremlin, and his removal from the position of deputy prime minister can be seen as a blow to the clan. However, he has been put in charge of another project. Last week, Sechin was named chief of Russia's state-owned oil giant, Rosneft. Stratfor sources have said Sechin was tasked with restructuring the company and the country's oil sector as a whole. Although Sechin is no longer in the Kremlin's elite circle, he will still have a great deal of influence in the Russian energy sphere.

Novak's appointment is also part of the Kremlin's focus on restructuring the energy sector. Novak, a former deputy finance minister, has a mind for finance. His appointment coincides with the Kremlin's struggle to professionalize, modernize and restructure its energy sector and to start planning and financing future energy projects. In previous years, the Kremlin considered Russian energy to be a political tool rather than an economic sector in need of improved efficiency, despite the fact that energy is the source of most of Moscow's revenues. Novak's financial expertise could lead to an improvement in the energy sector's economic performance.

The third shift in focus — toward re-establishing control over the country's regions — is evident in several dismissals, rather than new appointments. Interior Minister Rashid Nurgaliyev, Regional Development Minister Viktor Basargin, and Emergencies Minister Sergei Shoigu were all removed from their posts. Although some internal politics played a role in these dismissals, these men are also under consideration as candidates for regional gubernatorial positions. The Kremlin has faced a backlash in regions across Russia, with Putin's United Russia party losing a string of mayoral elections. The Kremlin is now focusing on a series of regional gubernatorial elections that will be held throughout the year. With a new law allowing the direct election of regional governors, the Kremlin is concerned that it will lose its hold on the regions and is lining up some well-known candidates to run in the elections. By dismissing these men and freeing them up to run for regional gubernatorial posts, Putin is trying to make sure some of his closest loyalists will be positioned to help him maintain control throughout Russia.

Though the makeup of the new government is not surprising, since those who were appointed or reappointed are Putin loyalists, the new government does show one overall trend: Putin is laying the strategic economic groundwork for Russia's future instead of focusing heavily on security and political consolidation inside Russia, as he did with previous governments. However, Putin is not entirely secure in his position due to the worry that the Kremlin's hold on the country could be loosening in the regions. While Putin wants to focus on the future of Russia, he is also devoting some attention to keeping the country united in the short term.

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