Moscow Mayor Sergei Sobyanin will stand for re-election in September 2018. He has governed the country’s richest city since 2010 and is a close ally of President Putin. Today’s analysis unravels the gatekeeper to the wealth of the Russian capital, a man who is also rumoured to have higher political ambitions.
The much-anticipated return of Alexei Kudrin to the cabinet of ministers did not materialise. Instead of a role that would allow him to take part in implementing Russia’s long-term economic development plan he helped design, Kudrin was appointed head of a public finance watchdog. Yet, investors hopeful for reforms should not be discouraged as Kudrin’s new role will largely depend on how he interprets it.
The return of Bidzina Ivanishvili to politics as the official leader of the Georgian Dream Coalition provides another example of unfolding uncertainty in the Caucasian country. As with the governments preceding it, the GD are teetering on the verge of de facto collapse – exacerbated by its failure to deliver on its most basic promise: improved economic performance. Unfortunately, there is little to suggest that once promising Georgia will embark on the gamut of reforms needed to truly make it a transparent democracy, and a welcome environment for foreign investors.
Putin’s inauguration marked the start of government reshuffles in Russia. The most significant change happened to the Deputy Prime Ministers; five have been replaced. Shadow Governance Intel looks at who is in and who is out of the new government and explains what the new appointments reveal about the power balance within Russia’s elite groups.
Last month Naftogaz celebrated a big victory in a lawsuit against Gazprom. However, its domestic battles have been far less victorious. One major stumbling point is the system of gas supplies dominated by oligarch Dmitry Firtash. Despite international pressure, and the obvious economic benefits of unbundling the system of gas supply and distribution, the government has been reluctant to challenge Firtash’s monopoly. Shadow Governance Intel analyses the standoff between Naftogaz and the Firtash-controlled regional gas suppliers, and explains why the government continues to resist change.
Putin’s unsurprising victory in last month’s Presidential election, launching his 4th term in office, designates the onset of a new phase of Russian politics. Having already realized his foremost intention - that of reasserting authority of the autocratic state, Putin is now faced with crafting an escape plan whilst avoiding economic crisis, or a damaging succession battle among the elite.
Under the tenure of President Poroshenko in Ukraine's Post Euro-Maidan environment, there are strong indications that the country's 'old' oligarch class are faltering. Once noted for the commercial and political influence they held, the likes of Akhmetov, Firtash, Pinchuk and Kolomoysky have been faced with a succession of closing doors in Kyiv.
Despite the progress made by Ukraine towards the liberalisation of the gas market, its reform efforts have been marred by the political headwinds and interference of powerful elite networks. Overcoming this inertia will determine Ukraine’s future financial prosperity; however, the window of opportunity is closing. The break-up of Naftogaz is a very undesirable thing from the perspective of key stakeholders, in the sense that it would create significant competition in the marketplace – a market they have controlled both in terms of production and marketing.
The marriage between Tajikistan President Rahmon's second oldest daughter, Ozoda, and Jamoliddin Nuraliev, has created an emerging 'power couple' that is slowly consolidating significant political and commercial capital. Their initial rise may not appear spectacular, but their swift rise through the ranks of government has given them considerable leverage, with Nuraliev now considered a 'grey cardinal' of the economy.
An obscure provision tucked inside the CAATSA sanctions law, signed in August 2017, is sending many Russian oligarchs into a tail spin as they wait – with bated breath – to see if their names will appear on an official US Treasury blacklist due to be published next week. Although largely a subjective exercise, certain metrics have been stipulated to identify oligarchs favored by Putin. Whatever the result, the impact is already becoming evident.
To further consolidate his position, President Mirziyoyev has replaced much of Karimov’s old guard with his own loyalists. Cutting powerful Security Chief Inoyatov from the picture, however, has taken more effort. The more the new President cements his own (absolute) power base, the less of an obstacle the once powerful Inoyatov becomes.
In 2018, Putin is expected to be re-elected for his 4th presidential term. He will do so against the background of eroding institutions and underhand elite infighting. The transition of power in 2018 and the changes in the ruling elite will happen in the context of slowing economic growth and depleting financial reserves, weak institutions, negative foreign policy inertia, and a risk of social tensions.