Medvedev goes after state corporations

There are some potentially big changes happening in Russia – ones that will either shake up the country’s stagnant economy or shake up its political landscape. Or both. Or neither. Either way, it’s worth parsing what’s going on.

On Wednesday, President Dmitry Medvedev said government ministers should no longer hold seats on the boards of state-run companies because it harms the country’s investment climate. The presence of Russia’s top government officials on company boards has long been a symbol of the state’s overwhelming control over the economy (before Putin moved him to the Kremlin, Medvedev, then a first deputy prime minister, chaired Gazprom’s board).

Today, Medvedev’s chief economic advisor, Arkady Dvorkovich, made it known that Medvedev was serious. Finance Minister Alexei Kudrin (chairman of VTB Bank) and Deputy Prime Minister Igor Sechin (chairman of oil giant Rosneft) could be among the first to go, he said. Some have taken the statement as a blow against Sechin, one of the most powerful, and secretive, of state officials and a close Putin ally. Was this a pre-election blow against Putin’s main man, just one year before the vote is due to be held? The speculation of a rift between Putin and Medvedev, or at least between their two groups of supporters, has grown so loud that the Communist Party put together this video, to the tune of disaster film 2012:

Medvedev and Dvorkovich, leading relative “liberals” in the Russian political sphere, have made attracting much-needed foreign investment a key cause. But will the move be meaningful, or simple superficial? Will it work to improve transparency or, on the other hand, make it worse?

Take Gazprom for example – its CEO is Alexei Miller, an old St Petersburg friend of Putin’s who had zero experience in the energy sector when Putin appointed him to the country’s leading moneymaker. He is believed to act as little more than a figurehead for the firm. Bureaucrats don’t need official titles to wield influence, as Dvorkovich himself noted.