Dimitrovgrad Apocalypse – Kudrin resigned

Monday should be a new Apocalypse? Well, was one… to Dimitrovgrad (Volga).

After the replacing of Mikhail Prokhorov in composition of the Commission for Modernization, Innovation and Technological Development of Russia’s Economy (the presidential decree was published Sunday on the website of the Russian Presidency), new week began under the auspices of not very peaceful. Within the framework of the 26th meeting of the Presidential Commission mentioned above, President Medvedev – in an access of recovery dignity (lost Saturday at the Congress of United Russia party) and that would have deserved a better

Meeting of the Commission for Modernization and Technological Development of Russia’s Economy

cause – sharply warned Vice-premier and Finance Minister Alexei Kudrin and ordered him to resign if he continued to disagree over economic policy. In reply, Alexei Kudrin, disciplined this time :), a few hours later resigned… After all, according Putin’s spokesman Dmitry Peskov, Kudrin will remain in Putin’s team … team that in May 2012 will move  to the Kremlin and will supervise activity of Prime Minister Medvedev’s government. Government that will have to take many unpopular measures that are needed, but normally will be postponed until after elections. Medvedev’s approach was a non-constructive, useless and more likely to turn against him.

So a brief recap: After Saturday’s announce about Putin – Medvedev rocade, Mr Kudrin (in the United States at the G20 meeting works) said in a press statement that “he could not serve in a new government next year if, as expected, Prime Minister Vladimir Putin and Mr Medvedev switch roles and he could not serve under Mr Medvedev if he becomes prime minister because of differences over budgetary policy” – said AP. Monday, president Medvedev not hidden their disapproval and pointed with his finger to Mr. Kudrin: “If, Alexei Leonidovich [Kudrin], you disagree with the course of the president, there is only one course of action and you know it: to resign. This is the proposal I make to you. You need to decide quickly what to do and give me an answer today” Mr Medvedev said. Mr Kudrin said he would consult with Prime Minister Putin. Later, he offered his resignation and it was quickly accepted.

Medvedev’s televised speech can be watch here.

So, that might be even more important move then Saturday’s Putin’s decision to run for the third term. Alexei Kudrin has been Finance Minister of Russia in the last 11 years, during the mandate of Putin and Medvedev presidency. It is considered a professional, with excellent relations both among bankers on Wall Street and the world of European finance. Although excellent relations with Prime Minister Putin, his relations with Mr Medvedev had been strained for some time. Recent he criticised the president’s plans to increase military spending. In my opinion should not be a specialist to notice that in times of crisis such a priority does not sound good. But politics has other reasons sometimes less visible.

Russia Finance chief resigned generated a lot of conflicting opinions. Mass media, social networking, renowned experts and politicians have said opinions. Of course, not without speculation. It spoke that public conflict between President Dmitry Medvedev and Minister Kudrin in fact has exposed deep cracks in unity over Vladimir Putin’s plan to return to the Kremlin. Most government and Kremlin officials kept a low profile on Monday. None rushed to side with Kudrin. But the presidential aide Arkady Dvorkovich wrote on Twitter: “Kudrin did much good for Russia, was one of my teachers. In the current situation, a decision was not, the reasons the President called”. There were some who argued that Kudrin’s departure is good news and it will escape Russia to the domination of  Wall Street′s bankers. I am not specialist in finance and economics … but I cannot believe that a fool can remain in office minister 11 years, even if talk of Russia. “Mr Kudrin’s resignation will worry foreign investors, who have praised his handling of Russia’s economy” says the BBC’s Steve Rosenberg in Moscow. “Putin seems to have decided that Kudrin’s head was a price to be paid to ensure his smooth succession back to the presidency,” said Timothy Ash, emerging markets economist at Royal Bank of Scotland. “The market will now fear that relative fiscal prudence, for which Kudrin was seen as a linchpin, will go out of the window.” Julia Tsepliaeva, Chief Economist Russia and CIS for BNP Paribas, said Kudrin’s departure could lead to populist government spending and quickly run down the rainy-day fund. “In addition, the dismissal of the strongest representative of the liberal economic wing of the government may result in the strengthening of the ‘siloviki’ (security forces) influence” she said. “It is difficult to see how Mr. Kudrin’s resignation can be anything but market-negative” said Neil Shearing, chief emerging markets economist at Capital Economics Ltd in London. “With oil prices starting to slide and financial markets still jittery, now is not a good time for the government to lose its arch fiscal hawk.”

Of course, there are many questions. In some of them will find answers, others may not. It said that Kudrin, a close Putin ally who appeared to be frustrated at not being offered the premiership under the succession plan, was left with little option but to resign. Ok. Moscow policy even can to offer surprises of double or triple the agreements. But Kudrin is not a child, is not a neophyte (like Prokhorov, par example). How did such an emotional reaction? (Update – 29 September 2011:In his first statement after resignation, former Russian finance minister Alexei Kudrin said that his decision was not an emotional reaction. “In connection with the numerous commentaries about my resignation, I would like to clarify the following. My statement about how I do not see myself in the Cabinet of 2012 (after the elections) was well-thought out and considered. First, over the course of several months, despite my numerous objections, including public ones, decisions were made in budget policy that without doubt raise the risks to the budget.  And risks to the budget linked most of all to inflated appropriations for defense and the social sector would inevitably spread to the entire national economy.” Full statement can be read here.)

Agreed that the president Medvedev was surprised and humiliated after Kudrin’s statement in Washington. But the change a minister with 11 years of experience when the capital markets are crazy, the statements of key political and financial players are more worrying and any day could collapse the world financial markets ?! …What is the most important for Russia President? Pride or wisdom?

Such policy disputes are rarely seen and spoken aloud in public in Russia, where political life is usually orchestrated at the highest level, the agreements are made behind the closed doors and open dissent over policy is unusual. But there are already two such scandals in just two weeks: Prokhorov vs Surkov, Medvedev vs Kudrin. What is the price of Russia’s future stability? And who pays in the end?…

and, finally, why smiling relaxed Mr. Surkov during the Kudrin’s «verbal execution» by President Medvedev ?? 😀


One response to “Dimitrovgrad Apocalypse – Kudrin resigned

  1. Pingback: Power&Politics World » Aleksei Kudrin – șef peste Consiliu consultativ internaţional pentru Federaţia Rusă

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