Johnson's Russia List
20 May 2003
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A CDI Project
May 20, 2003
THE FUTURE OF THE MINISTRY
What might happen to the Economic Development Ministry without Herman Gref?
President Vladimir Putin values Herman Gref - and makes that clear
Author: Vera Sitnina, Ivan Gordeev
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
ECONOMIC DEVELOPMENT MINISTER HERMAN GREF IS BACK AT WORK, AND HAS
MET WITH THE PRESIDENT. VLADIMIR PUTIN INSTRUCTED GREF AND HIS
MINISTRY TO DRAFT A PLAN FOR IMPLEMENTING THE OBJECTIVES SET OUT IN
HIS ANNUAL ADDRESS TO PARLIAMENT. BUT THERE ARE STILL RUMORS THAT
GREF'S RETURN TO WORK MAY ONLY BE BRIEF.
Economic Development Minister Herman Gref is back at work.
Following a brief conference with his deputy ministers, Gref met with
the president. According to what official information is available,
Vladimir Putin instructed Gref and his ministry to draft a plan for
implementing the objectives set out in his annual address to
parliament. No one knows what else Putin and Gref might have
discussed. It may be added, however, that Gref is one of the few
Cabinet members known for being close to the president; so observers
do not rule out the possibility that Gref and Putin may have discussed
the state of the Economic Development and Trade Ministry.
During Gref's leave of absence, relations between the ministry
and the Cabinet staff reached an all-time low.
Tension escalated earlier this spring. The conflict erupted in
early April when Senior Deputy Economic Development Minister Mikhail
Dmitriyev all but accused the Cabinet staff of sabotaging the pension
reforms. The Cabinet staff struck back: an assessment of "not entirely
competent" was added to Dmitriyev's personal record.
Gref's subordinates must have decided to go down fighting.
Shortly before the Cabinet met to discuss administrative reforms,
Dmitriyev and Deputy Economic Development Minister Arkady Dvorkovich
publicly alleged that the Cabinet staff had been rewriting documents
drafted by the Economic Development and Trade Ministry.
According to Dvorkovich, the socio-economic development program
which reached the president's desk was not the same document approved
at a Cabinet meeting. This version of the program was much shorter,
and did not include a number of vital provisions.
Had Gref been in good health, the public would never have learned
of this. Gref, a team player, might have gone directly to the
president - and that would have been that. His deputy ministers do not
have direct access to the president; so they were forced to speak
What followed was a period of waiting for the Economic
Development and Trade Ministry. Everyone expected the dismissal of the
two audacious deputy ministers and reprimands for the rest. Nothing
happened. The Cabinet meeting which discussed the administrative
reforms was unusually tranquil and well-mannered. The prime minister
praised the Economic Development and Trade Ministry for its
achievements in identifying superflous state functions, and dismissed
problems with economic deregulation to inadequate enforcement of new
All the same, Gref returned to face the need to settle the
conflict, whether all by himself or with the president's help. It
doesn't help that (according to our sources) Gref's state of health
remains fragile and his return to work may only be brief.
Some observers do not rule out the possibility that this whole
conflict is related to the future of the Economic Development and
Trade Ministry. If Gref's health fails again in the near future, the
president will be forced to replace him, whether he wants to or not.
But "decapitating" the ministry which is leading the way along the
path of reforms is not something to be considered lightly in an
It doesn't really matter how the minister is replaced
(resignation, dismissal, or any other option). What counts is who will
head the ministry after Gref: members of Gref's team or someone else.
Certain rumors indicate that Dmitriyev and Dvorkovich would never
have challenged the Cabinet so outrageously without Gref's approval.
Their public statements may be attributed to an intention to gain
political mileage. The future minister will need political weight.
It is hard to say how all this will end. The president values
Gref: an assumption supported by the fact that the Economic
Development and Trade Ministry has been instructed to draft a plan for
implementing the objectives set out in the presidential address.