Ivanov’s Star Rising, Medvedev Falters?

Following Vladimir Putin’s reshuffle of his cabinet this week, many in the media have been speculating on what these new appointments reveal about his preferences for a successor. Yesterday Putin promoted Defense Minister Sergei Ivanov to first deputy prime minister, placed Anatoly Serdyukov (who as head of the Tax authorities was responsible for drawing up the fictional back-tax claims against Yukos) as the new defense minister, and Sergei Naryshkin of Rosneft as deputy prime minister. The promotion of Ivanov puts him on equal footing with the favored candidate and head of Gazprom, Dmitri Medvedev, and places pressure on Prime Minister Mikhail Fradkov, considered a lame horse but not without potential of being installed as a puppet president. Does the promotion of hawkish Ivanov serve as a warning to the West? So what are we to interpret from this cabinet shuffle? I’m actually not inclined to believe that very much has been revealed at all, aside from the fact that Putin is insulating himself with his closest former KGB friends from St. Petersburg. The inner circle is becoming tighter even yet. The promotion of Ivanov serves two immediate purposes in my mind: 1) Just following the Munich Cold War speech, nudging forward the hawkish Ivanov serves as an explicit warning to the West to ease back on NATO, OSCE, and missile defense in Eastern Europe (it is widely assumed that the business community would much prefer to see Medvedev get the presidency, who proved at Davos he can talk the talk with the diplomats). 2) Putting Ivanov on equal footing with Medvedev serves an important PR function – the illusion of some type of competition within this “managed democracy.” However like most things happening within the Kremlin, no one can really be sure what any of this means. Numerous papers are running through all theories, but yesterday Stratfor posted these interesting scenarios:

The key bits of information missing at this time are the status of the two most powerful people on Putin’s team: First Deputy Prime Minister Dmitry Medvedev and Prime Minister Mikhail Fradkov. Their fates will determine whether this is a simple reshuffle to prepare for the 2008 presidential election or Putin’s final decision on which path he feels Russia should follow. Scenario No. 1: Medvedev and Fradkov stay in their current positions. Medvedev and Ivanov are widely anticipated to be the two people to whom Putin plans to transfer power when he steps down as president in 2008. Assuming Medvedev is not dismissed, the two would formally and legally be on equal footing. This would indicate no real change since everyone already sees the two men as trusted confidants of the president — and already equal in Putin’s eyes. Based on current information from U.S. government officials, this seems the likeliest scenario. Scenario No. 2: Medvedev is promoted to prime minister and Fradkov is fired. Fradkov has no power base of his own and is a disposable bureaucrat whom Putin installed to absorb and deflect any criticism over unpopular policies. Dismissing him and moving Medvedev into his slot would be very similar to the first scenario, with one exception. Fradkov is not only Putin’s bureaucrat, but also belongs to Russian oligarch Mikhail Fridman. If Fradkov is dismissed, it would be a huge blow for the Fridman camp, and would indicate that Fridman’s assets — such as oil major TNK-BP — could be about to face significant difficulties as Kremlin politics realign. Scenario No. 3: Medvedev is dismissed. While this is the least likely scenario — as of now we have detected no indication of any falling out between Medvedev and Putin; if anything, their relationship is strengthening — this would indicate that Putin already has decided that the time has come for a far more militarily aggressive strategy for Russian policy, both foreign and domestic, and that Ivanov will be his successor. While Ivanov is a pragmatist, he also leads the country’s siloviki faction of national security personnel who want to see Russia re-attain its status as a great power. The appointment of an economist from St. Petersburg — Serdyukov — to the Defense Ministry would be intended to serve as a check on the siloviki’s power, ensuring that what resources it does manage to access are used prudently.

And in regards to Russia’s unusual new defense minister? From ArmsControlWonk:

So who is Anatoly Serdyukov? What are his qualifications for defense minister? I am going to guess he is buddies with Putin. Serdyukov is an economist. He started his career in St. Petersburg and after graduating college in 1984, he was manager of a furniture store. From 1993-2000 he was deputy manager, marketing director, and general director of a very big furniture company in St. Petersburg. Fast forward through high-level St. Pete tax ministry appointments, a fancy new tax system, and by 2004 he is head of the Federal Tax Service. After reorganization in 2005, he had the power to appoint all the top tax officials throughout the country. So in summary, the man knows how to collect and enforce those taxes. How a career in tax collection prepares one for military reorganization and foreign policy, I have no idea. However, it looks like Ivanov will not be giving up his control of significant money channels. AP reports that he will continue to oversee Russia’s arms trade.