Institute of Modern Russia

1. The New Government

The situation: The mess of the transition period is over. Russia’s new government entered office on May 18, renewed by 40 percent. With 14 new faces among the 32 ministers, it remains to be seen how they will implement the “breakthrough” Putin spoke about in his election campaign. How Putin has formulated a system of checks and balances won’t be clear until next week, when the Presidential Administration and the Security Council are finalized.

The breakdown:

• Dmitry Medvedev’s team has been significantly cut down, and Putin’s businessmen friends—such as the man behind the Crimean Bridge, Arkady Rotenberg, and Yuri and Mikhail Kovalchuk—have added their touch.
• As in the past, a dismissal may actually be a promotion. Recall the former head of the Presidential Administration Sergei Prikhodko, who resigned in the past only to be appointed first deputy chief of staff, retaining most of his powers and privileges. [New Times]
• With Anton Siluanov as both Finance Minister and Vice Economic Minister, Russia’s economic policy will be highly contiguous with that of the last term. Siluanov, known for his rigid approach to budget expenditures—even during times of crisis—is now in charge of monitoring the expenditure of 25 trillion rubles to implement Putin’s May Decree.
• The appointees also represent various groups of influence. Heavyweights like Sergei Lavrov (Foreign Minister), Alexander Novak (Minister of Energy), and Siluanov are direct appointees of Putin, and officials with ties to corporations occupy a more important place in the government than ever before. As expected, the vice premiers will carry out ideological functions, while ministers engage in the execution of these ideas. [RBC] 

What it means:

• Konstantin Gaaze, political commentator: In Russian politics, they way things are done says a lot more about the political situation than what policy is implemented—the formation of the cabinet is more important than who is appointed to it.
• Importantly, there were no preliminary negotiations about which vice premiers would be dismissed and appointed—everything happened at once.
• For a moment, Putin’s lack of interference in Medvedev’s nominations signaled a new degree of independence for the prime minister—but then the ministerial appointments emerged from the shadows and the potential for Medvedev and his team to act independently evaporated. This leads to an inverted government: the ministers will exercise political weight over the deputy prime ministers, who answer to Medvedev.
• Some say that this government reflects a plan for the upcoming transfer of power. Others believe that it is a “transfer before the transfer”—these players will have no political meaning on purpose, at least in the context of 2024.
• This government preserves and reproduces Putin’s isolationist, reactionary, and contradictory agenda, allowing the president to maintain power over his cabinet of ministers, administration, state-owned companies, and state banks. [Carnegie.ru]
• Tatiana Stanovaya, Center for Political Technologies: While the previous government under Medvedev was perhaps the most technical and depoliticized in all of Russian history, the new government has a larger political agenda.
• Recruitment was on the sidelines of Putin’s agenda, which mostly concerns foreign policy. The involvement of both private and public corporations in the new cabinet is necessary; the state apparatus will be increasingly expected to manage without the direct involvement of Putin, who will be busy with lofty geopolitical tasks. [Carnegie.ru]

Dig deeper:

• Ella Paneyakh, Higher School of Economics, St. Petersburg: The 2018 election was not a turning point for Russian politics—that took place back in 2012-2014. Russia has a young regime and, like any young regime, can collapse under the influence of external shocks, though foreign attacks and revolutions aren’t expected.
• This regime can cope with domestic issues—not by solving them, but by building and developing the power mechanisms of repression in order to maintain power. Therefore, it will last longer than the next six years, even if it falls after a few decades. [Republic]
• Alexander Rubtsov, Russian Academy of Sciences:Putin’s liquidation of the Federal Agency for Scientific Organizations (FANO) and its absorption into the Science and Higher Education Ministry (now one branch of what was formerly the Education and Science Ministry) is hardly a liquidation at all. Rather, it reflects the government’s desire to create a weighty bureaucratic authority that abides by Putin’s rhetoric of an “imminent technological breakthrough.” [RBC]

2. May Decrees 2.0 

The gist: The May Decree outlines the main national development goals that the government will implement in the next six years, from increasing the standard of living and halving the poverty level to accelerating the introduction of digital technologies in the Russian economy and social sphere. The government has until October 2018 to submit national projects on the 12 areas covered in the decree. [Kommersant]

Can they be implemented?

• Sergei Guriev, EBRD: The goal for any country is to increase the rate of potential economic growth, which requires increased productivity and investment, both of which were promised by the 2012 May Decree. This year, Putin set more modest goals, but still claimed that the GDP would grow faster than the world average of almost 4 percent.
• Though unemployment is low and there are no signs of imminent recession in Russia, without reforms or the potential for reforms in the near future, Russia’s GDP growth will be the slowest of all EBRD countries in the 2018-2019 period: about 1.5 percent per year. [Vedomosti]
• Alexandra Polyakova, Russian Academy of Sciences: Putin claims that Russia needs to simultaneously replenish budgets at all levels and fulfill social obligations—all the while without restraining economic growth.  
• One of the main questions is how to spur labor productivity, both in terms of raising incomes and guaranteeing future jobs. Connecting all parts of the country with modern communication is a huge hurdle, as is infrastructure. But it’s not clear who will implement these changes or how. Financial independence needs to be ceded to regions and municipalities. [Forbes.ru]
• Anastasia Manuylova, correspondent: As the newly appointed vice premier on social issues Tatiana Golikova must tackle the issue of the retirement age, which both the Ministry of Labor and Golikova’s inherited subordinates seek to raise.
• But judging by Golikova’s past statements, the reform isn’t an obvious necessity. She also doubts the need to reform the extrabudgetary funds for pensions, social, and medical insurance—this would make the Pension Fund more powerful than either the Ministry of Labor or the Ministry of Health.
• It’s possible that because her controversial opinions are already public, Golikova can realize more ambitious policies—once these are accomplished, she can retire under the pretext of public discontent. [Kommersant]

A telling sign: The May Decree also promised to increase teachers’ salaries—some teachers make less than the minimum wage, while others receive four times that amount, depending on the region. But instead of increasing income per capita, officials decided to reduce staff—raising wages, but increasing the burden on the teachers who remain. [Ekho Moskvy]

3. Roizman’s Resignation 

The story: this week Yevgeny Roizman, mayor of Yekaterinburg and one of the few pro-democracy officials in Russia, resigned in a sign of protest against the abolition of mayoral elections in the city.

• Many members of the Russian opposition hailed the move as “beautiful” and “absolutely correct” and lamented the city losing a bright politician. [Svoboda]

What happened:

• The abolition bill was passed by the regional legislature at the suggestion of the region’s governor Yevgeny Kuyvashev, who first introduced the idea in April. [Kommersant]
• In an interview, Roizman said that he was disappointed by the actions of the regional deputies with whom he had been working over the last five years. His impromptu decision to resign was driven by his unwillingness to participate in what he called a “shameful situation” and “undignified fuss.”
• He also took credit for numerous improvements in the city management and urban development and floated the idea that he would consider running for the Duma in 2021. As of now, Roizman plans to focus on his social projects. [Meduza]

What it means:

• Alexander Kynev, expert in regional politics: it is more important for Roizman to preserve his reputation; however, it is not clear whether he will get a chance to use it for the election.
• Alexander Pirogov, political scientist: this resignation will give Roizman a “certain symbolic capital,” this bright move is not the end, but rather an exclamation point in his career. [Kommersant]
• Oleg Kashin, journalist: the Kremlin continues to oppose direct elections in Russia, citing national security concerns: fewer elections means fewer criminals, terrorists, and other “undesirables” would come to power. It was only a matter of time that a “non-systemic politician” (an outsider in Putin’s “vertical of power”) would be squeezed out. [Republic]

Other stories that mattered this week (in Russian)

• “Dictatorship collapses when no one is expecting it”: Polish dissident Adam Mikhnik compares political developments in Russia and in Poland. [Republic]
• “1998 crisis: 20 years later”: Economist Sergey Alexashenko remembers the lessons of the 1998 financial crisis. [Ekho Moskvy]
• “The last sanction, or What the ‘punitive’ arms race will lead to”: Political scientist Vladimir Pastukhov discusses the Duma’s initiative to punish Russian companies and individuals for compliance with Western sanctions. [MBK Media]