2011: A New Horizon for Investment?

Dmitry Medvedev2.jpg

Is Dmitry Medvedev ramping up efforts to win the public’s vote ahead of next year’s Presidential elections?  It seems almost absurd to put such a motive behind recent events, given how staged the bigger Russian political moves always seem to be, but Reuters suggested yesterday that his challenge to Putin over those Libya ‘crusade’ comments constituted a bid for the popular vote and ‘the biggest gamble of his career‘.  And today’s news, which brings an exciting, if not positively revolutionary proposal to the table, supports this view.
Medvedev is calling for the removal of state ministers from company boards as a matter of urgency, in order to rescue the investment climate from its current ‘very bad, very bad‘ condition.  The measure in question was originally introduced by Vladimir Putin, and its overhaul would be a sharp indication of Russia’s break with the Putin-dominated past.  Medvedev himself was of course a beneficiary of this, and acknowledged his own past role as a Gazprom boardmember, saying that the process ‘made sense at some point when it was necessary to bring companies together‘, but now ‘may produce the opposite effect‘.
The proposal comes at an interesting time in relation to the currently embattled BP-Rosneft deal.  You’ll recall that Igor Sechin has been vocally presiding over this deal, implying that last week’s Stockholm court injunction was somewhat meaningless in the grander scheme of things because the company would get what it wanted regardless (‘In any case, we want to follow the plan‘).  But here’s the catch: if Medvedev’s proposal were to come to fruition, Sechin could be the first to lose his post.

Asked which companies Medvedev had in mind, Kremlin chief economic aide Arkady Dvorkovich named Rosneft, where Sechin has been board chairman since 2006, and VTB, where Finance Minister Alexei Kudrin is chairman of the supervisory board.  “We are speaking about companies which work in competitive sectors. For example, VTB and Rosneft could for sure be examples of such companies,” Dvorkovich said.
Sechin is a long-time Putin ally, who initially was opposed to Medvedev taking the presidential role, and Brian Whitmore characterized relations between he and Medvedev in 2009 as ‘one of the more intense rivalries in Putin’s inner circle‘.  If the move were to go ahead this year, as Medvedev implied, it would undeniably be a breath of fresh air for Russia’s investment climate and win him many new supporters.  We’ll see whether or not he is able to pass such a measure, which would surely face serious resistance from the Kremlin’s many businessmen.  No hard feelings if it does, though, please.  Medvedev apparently ‘told members of the government “not to be offended” when they are removed from the boards of directors and said that they had much other work to do.