Image by duma.gov.ru (duma.gov.ru), via Wikimedia Commons.  Accessed 19.06.2018

 

The new Head of Russia’s Accounts Chamber, Alexei Kudrin, is perhaps one of the most peculiar power players in modern Russia. He is best known as the country’s longest-serving Minister of Finance (2000-2011) and has remained among the best-connected liberals even after leaving his post in 2011.

Yet, Kudrin’s name is also synonymous with reforms and the opening up of Russia’s economy, which is why his promotion to power has been favoured (and anticipated) by investors and the business community.

In the 1990s, Kudrin worked alongside Putin in the St. Petersburg City Council, under the then-governor of the city, Anatoly Sobchak. As it happens with Putin’s allies from his St Petersburg years, Kudrin entered the highest echelons of power right after Putin was elected President.

Kudrin resigned from his last government post, reportedly after disagreeing with then-President Dmitry Medvedev over how to manage Russia’s state budget. Kudrin then criticised the government for excessive spending on defence, for which Medvedev called him their “in-house opponent” (Forbes Russia, 19.06.2013). Their conflict escalated when Kudrin publicly claimed he would not be part of the government should Medvedev become Prime Minister after Putin’s re-election in 2012.

Evidently, Kudrin’s promise extends to Putin’s fourth presidential term.

The hopes of his much-anticipated return to the Cabinet of Ministers did not materialise; most likely due to a Medvedev’s ultimatum. Instead, Kudrin was offered to head Russia’s Accounts Chamber, a public finance watchdog. With some hesitation, Kudrin accepted the offer. On the 22nd of May, the State Duma officially approved his appointment (Interfax, 22.05.2018).

Shadow Governance Intel explains what this appointment means for the business community and prospects of much-needed economic reforms.

Key Points

  • While this appointment might not be what investors and liberals hoped for, it formalises Kudrin’s position within the government (where he still has many allies) while placing him outwith Medvedev’s reach.
  • Although the position of the Head of the Audit Chamber does not provide for implementing reforms,  it does make Kudrin a de-facto controller of the government as he will be assessing the performance of the ministries in regards to strategic KPIs.
  • The supervisory functions of the Accounts Chamber and direct accountability to the President could give Kudrin enough power to influence the government’s decision-making process.
  • Should Kudrin use this power and navigate it well, he would be in a good position for “promotion” during the anticipated mid-term pre-succession government reshuffles.