Courcy’s Intelligence Brief

We made two points about the Russian power struggle last week. The first was that it was real and intensifying, the second was that the difference between Prime Minister Vladimir Putin and President Dimitriy Medvedev might not be as great as it is being portrayed. Further evidence supporting both these conclusions can be found in the resignation of Deputy Prime Minister Igor Sechin as chairman of the state-owned oil company Rosneft.

Medvedev, who is presenting himself as the liberal option for the ruling party in 2012, set out a 10-point strategy for improving Russia’s investment climate on 30 March. The measures include extra protection for minority shareholders, a three-year plan to privatize major state shareholdings, and the removal from compnay boards of ministers and deputy prime-minister who have a regulatory role in the sectors of the companies in question, with a mid-year deadline.

Those affected by the measure concerning ministers include Finance Minister Aleksey Kudrin (bank VTB), First Deputy Prime Minister Viktor Zubkov (agro-business Rosagroleasing), Deputy Prime Minister Sergey Ivanov (nanotechnology business Rosnano), Transport Minister Igor Levitin (Aeroflot), and Energy Minister Sergey Shmatko (hydroelectric company RusHydro, pipeline company Transneft, and gas giant Gazprom).

The speech, in which Medvedev virtually accused major state corporations of corruption, was seen as an attack on Putin and his associates and a further deepening of the power struggle. Sechin, who is one of Putin’s closest associates and thought to have been the chief architect of the downfall of jailed oligarch Mikhail Khodorkovskiy, took the hint and duly resigned on 11 April.

So far, so good. But sources in Moscow say that Sechin’s permanent replacement as chairman of Rosneft is likely to be Sergey Shishin, the vice-president of the bank VTB – and there is nothing reformist or liberal about Shishin. He is a former major-general in the Federal Security Service (FSB) who is said to be close to Sechin, to current FSB chief Alexander Bortnikov, and to his predecessor Nikolay Patrushev. As one commentator put it, Shishin’s appointment would represent a “nominal personnel rotation as a result of which there will be no change in the dominant actor”.