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Kudrin’s Comeback

Clifford Gaddy argues that the work of Alexei Kudrin is not yet done, and as soon as Vladimir Putin re-assumes the presidency, a new job will be invented for him to fulfill.

Kudrin and Putin came in August 1996 as a package, and in fact they operated under Chubais as such a tight team that Barry Ickes and I wrote that the two may as well have been a single entity—“Pudrin.” Chubais gave the pair a special role in the campaign he was launching to arrest the process of collapse of the Russian state and to rebuild the crumbling central authority. He appointed Kudrin head of the Central Control Directorate (GKU), a oversight agency that Chubais had beefed up to serve as the main enforcement arm in the campaign. This was, after all, the heyday of the “virtual economy,” when private businessmen and government officials at all levels were rampantly evading taxes and ripping off the state in every conceivable way. As press accounts at the time related, Kudrin turned the GKU into a “feared” agency, sending out teams of inspectors across the country on literally thousands of field missions each month to regional and local government offices, other state agencies, businesses, even army and police bases. He himself was described as ruthless in his pursuit of those who misused government funds and colluded to undermine the federal government. “Heads are rolling,” the newspapers wrote. Kudrin was in the limelight. Putin was in the background. He was in charge of the department that provided the financial and logistical backup to Kudrin’s GKU—a bagman of sorts to Kudrin. In the spring of 1997, when Chubais moved Kudrin over to become deputy finance minister in charge of Russia’s foreign debt, Chubais named Putin as the new head of the GKU.

There’s plenty more in the story of the Putin-Kudrin partnership, but this short version should make it clear why I don’t think Putin is abandoning Kudrin (or Kudrin Putin). They will continue to work together. The question is, how? Where does Putin want Kudrin now, so that he can continue to play his key role?

Out of Gaddy’s suggested jobs for Kudrin, head of the Central Bank seems most convincing.