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Kremlinomics

The FT weighs in on those unprecedented comments from Anatoly Chubais and Alexei Kudrin criticizing Russia’s aggressive foreign policy moves of late: “The remarks show that while the Kremlin has consolidated its power under President Vladimir Putin it has not eliminated internal debate and dispute. Although the siloviki faction, dominated by ex-KGB men, has won much ground, liberal officials have not given up the fight. Indeed, the naming of the non-KGB Dmitry Medvedev as Mr Putin’s favourite in the presidential election may have been a victory for the Kremlin’s non-KGB groupings.” More after the jump.

From the FT:

Kremlin economicsIt is rare for a top Russian official publicly to challenge the Kremlin, so when two do so on the same day it is worth taking notice.Anatoly Chubais, head of the state-run UES electricity giant, this week warned a conference that Russia’s assertive foreign policy risked harming the investment climate. Alexei Kudrin, finance minister, told the same meeting: “We need to adjust our foreign policy goals to guarantee stable investment.”The remarks show that while the Kremlin has consolidated its power under President Vladimir Putin it has not eliminated internal debate and dispute. Although the siloviki faction, dominated by ex-KGB men, has won much ground, liberal officials have not given up the fight. Indeed, the naming of the non-KGB Dmitry Medvedev as Mr Putin’s favourite in the presidential election may have been a victory for the Kremlin’s non-KGB groupings.It is hard to tell with officials jostling for power in advance of the poll. To suggest the liberals are winning while Mr Kudrin’s deputy, Sergei Storchak, sits in jail on fraud charges would be rash. But it is significant that Mr Kudrin felt brave enough to join the flamboyant Mr Chubais in lifting his head above the parapet.The two men are certainly right to speak out. Aggressive foreign policies are harming Russia’s interests. They scare inward investors while making life hard for Russian business people abroad, for example in securing UK visas.Russia needs open debate. If the Kremlin cannot stomach democratic politics – and it cannot – it must be pushed into allowing discussion over other issues, such as the economy. Of course, such non-political debates soon get political, as Mr Kudrin and Mr Chubais well know.The two men’s words will rightly be welcomed by those in the west who say Russia remains open to influence, not least through trade and investment.But it would be wrong to read too much into one conference. Mr Putin’s drive to restore Russia’s lost great-power status through assertive foreign policy has widespread support. It may not change much under Mr Medvedev, who on Thursday urged Russian companies to follow Chinese groups and splash out on foreign acquisitions. There was more than a touch of economic nationalism in the likely new president’s call to cut Russia’s dependency on foreign technology.Perhaps the most that can be expected is less anti-western rhetoric, and a few more compromises on non-vital issues such as the pointless British Council dispute. Even that would be a bonus.