The Power Vertical
It took less than two weeks and it happened so quietly you could easily miss it.
In a dry press release late Monday, the oil giant Rosneft announced that Deputy Prime Minister Igor Sechin was stepping down as its CEO.
Sechin — a close ally of Prime Minister Vladimir Putin and the informal leader of the “siloviki” clan of security service veterans who have dominated Russian politics for the past decade — became the first official to fulfill President Dmitry Medvedev’s March 31 order that government ministers give up their seats on corporate boards.
Merging the state, the security services, and industry, particularly the energy industry, was one of the central tenets of “Putinism” — and Sechin was its poster child.
Medvedev’s order, announced in a speech in Magnitigorsk, was seen by some analysts as the first step in dismantling — or at least weakening — this practice. It was also interpreted as an attack on Sechin, who is widely viewed as a rival to the president.
It is probably no accident that Medvedev chose today, just a day after Sechin left Rosneft, to give the strongest hint to date that he intends to seek a second term.
“I do not rule out that I will run for a new term as president. A decision will be made, moreover, in the fairly near future because there is less than a year remaining,” Medvedev said.
Medvedev made his comments in an interview with China’s CCTV ahead of a visit to that country for a meeting of the BRICS group of emerging market economies.
In the same interview, Medvedev said it was time to move beyond the model of state capitalism that Putin initiated after taking power in 2000.
“It is time for changes. Those who do not change remain in the past,” he said. “What was good 10 years ago isn’t good today. At some point we needed to gather together the foundations of our state and the destroyed economy. But we are not going to build state capitalism. This is not our choice.”
One way to interpret all this is that Medvedev has really gone out on a limb here and decided to take on Putin and hope for the best. (You can read Yevgeny Albats’ argument that this is the case here and my posts on the same subject here and here.)
I suspect, however, as I have blogged in the past, that Putin is actually on board with all this. And a closer look at Sechin’s departure gives some hints about where things may be headed.
According to Russian press reports, Sechin’s most likely successor at Rosneft is VTB senior vice president Sergei Shishin — a Sechin ally with a KGB background, according to analysts.
“The state can conduct its policies without Sechin in charge of the company,” said Artyom Konchin, an oil and gas analyst at Unicredit told Moscow News. “We saw today that one possible successor, Sergei Sishin, has KGB ties too. He is rumoured to be well connected in Sechin’s clique.”
So while Sechin is leaving Rosneft, the Kremlin is hardly divesting itself from the company’s operations. Russia Inc. will remain Russia Inc. — it will just be a little less in-your-face about it. Call it Putinism Lite. Call it Putinism With A Human Face.
Moreover, as Reuters reports, Sechin has not stepped down from his seats on the boards of InterRAO, the state utility company, or from Rosneftegaz, which controls large shares in both Rosneft and the state oil giant Gazprom.
As deputy prime minister, he also retains his portfolio of overseeing the energy sector.
So Sechin isn’t going anyplace just yet.
What appears to be unfolding here is consistent with my longstanding belief that Plan A is for Medvedev to remain president after 2012 but for Putin to remain the dominant figure in Russian politics — exercising power and influence as the leader of the “deep state” with de facto control over the security services.
He could do this as prime minister, as a beefed up general secretary of United Russia, or from some other yet-to-be-established perch. It doesn’t really matter, as long as he has the loyalty of the siloviki.
Medvedev’s modernization program can then proceed, albeit under Putin’s watchful eye to make sure any reforms implemented don’t endanger the dominance of the current elite.
— Brian Whitmore
Tags: Russia, Putin, Medvedev, tandem, Igor Sechin, Rosneft, 2012 elections