One of Russia’s political culture rules of thumb is that ranking officials must travel as far as possible from the ancient Kremlin walls in order to be able to share their innermost thoughts, to places like Davos, or the Krasnoyarsk forum, for that matter. It is almost as if the remains of erstwhile leaders bricked up within the Kremlin walls prevent freedom of speech. But once vice premiers or aides travel far enough out of their earshot, they no longer watch what they say so carefully.
Enter Alexei Kudrin, perhaps the government’s only symbol of economic liberalism, a veteran of both Ilyinka and Krasnopresnenskaya Embankment, who has survived two Putin terms and almost a whole Medvedev term, came out with some strongly worded statements in Krasnoyarsk.
All he said were banalities self-evident not only to mainstream liberals but also to anybody with an ability to think. Admittedly, in due course he was harshly rebuked by United Russia, whose functionaries and the inner circle of Kremlin wizard Surkov have traditionally been staunch opponents of the Minister of Finance and Deputy Prime Minister.
Kudrin said that Russia’s current political and economic system does not operate in accordance with the laws, which do still exist, but in accordance with an underworld code of conduct. Any rules are skillfully bypassed. He described such a system of governance as weak. He also guardedly complained that Medvedev’s rearmament programme will cost us 1.5% of the GDP, thus requiring some unorthodox revenue generating solutions, and that the pension system is underfunded, while expressing gratitude to those “informal activists” who draw his attention to the oddities and violations occurring in the prickly sphere of government contracts.
It is hard to believe, but Kudrin actually linked raising investment and painful reforms to free and honest elections. All in all, the Emperor’s loyal servant pointed unequivocally to the Emperor being naked.
So what happens next? Will Kudrin be fired? Will policy change? No and no again.
When, in June 2008, Deputy Prime Minister Igor Shuvalov, nicknamed the “false Igor Ivanovich” in contrast to the “real” one, aka Igor Sechin, mused about the perils of state capitalism and excessive government presence in the economy, his chief Vladimir Putin abruptly cut him short. Yet he has kept his job, but not only is the state still present in the economy, it now calls the shots and already holds a 60% share of it (this frequently cited number may actually be an understatement).
By the way, Shuvalov’s above-mentioned address is rumoured to have been lead written by Vladimir Mau, Rector of the government’s Academy of National Economy and an economist of the Gaidar school. Mau and his colleague from the Higher School of Economics, Yaroslav Kuzminov, have been given the task of developing a conceptual framework for moving the Russian economy forward. It is not supposed to be a programme but a set of alternative ways out of the stop-go development quagmire. The assignment came from Vladimir Putin, who thus took the forward planning function away from his colleague from the duumvirate. While the hyper-liberal Sergei Guriev from the Russian School of Economics has not been invited to work on the Framework-2020, Mau and Kuzminov cannot quite be dismissed as non-liberal economists. So Putin is about to get yet another set of liberal policy recommendations. And he will turn them down, just as he turned down Gref’s programme once upon a time.
Putin must be feeling that something is wrong with the economy. He turns to economists, but dislikes what they have to say because, each time, they contradict his ideas of life and management. This applies particularly to free elections being a prerequisite for an attractive and free economic environment. That is why Kudrin, Shuvalov, Mau, or Kuzminov might say the right and bold things and this will not hurt their careers or change anything much in politics either – because of an institutional, as liberal economists like to say, obstacle named Vladimir Putin – who requests reforms never to be implemented.