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Is Russian Strategy Shifting?

By all reasonable expectations, Russia cannot stay on its current path and hope to survive.  The operative word being “reasonable”.  As we have come to see in the past four years, Vladimir Putin’s actions are often anything but reasonable. 

If Alexei Kudrin is appointed to a heavyweight role in charge of outreach to Europe and the US, according to this FT article by Kathrin Hille, this signals a probable change in Russian policy and economics. 

Certainly, this is something to consider when observing Russia holistically, but this is certainly not a singular indicator or sign of anything major. Perhaps Putin has seen the light and wants to improve international relations with most of the rest of the world and this is the first of many changes. Maybe Putin believes the way forward is by taking new measures to improve their economy. Perhaps they will change their provocative behavior. 

Bottom line, just watch, wait, and learn. We live in interesting times.

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Putin looks at mending fences with west to revive Russia’s economy

Aide Alexei Kudrin considered for lead role in easing tension and restoring growth

Kathrin Hille in Moscow

President Vladimir Putin is contemplating an effort to repair relations with the west as sanctions and growing international conflict obstruct attempts to reinvigorate Russia’s stagnant economy.

Ahead of his inauguration next week for another six-year term as president, Mr Putin was considering appointing former finance minister Alexei Kudrin to a heavyweight post in charge of economic strategy and outreach to Europe and the US, said people briefed on the plans.

Mr Kudrin is one of Mr Putin’s oldest political associates and a senior economic adviser, and such an appointment could be read in western capitals as a signal of compromise from the Russian president in the face of conflict with the west on all fronts.

“The most likely scenario is that Kudrin gets a post in the presidential administration,” said a Russian government official. “His title could be something like: the president’s representative for international economic co-operation.”

Mr Kudrin wrote an economic policy strategy for Mr Putin’s next term in which he urged decisive structural reforms, from raising the retirement age to reorganising Russia’s government and judicial system.

Mr Kudrin has repeatedly said that unless Russia makes its political system more democratic and ends its confrontation with Europe and the US, it will not be able to achieve such radical changes.

“If Kudrin joined the administration or government, it would indicate that they have agreed on a certain agenda of change, including in foreign policy, because without change in foreign policy, reforms are simply impossible in Russia,” said Yevgeny Gontmakher, a political and economic analyst who works with a civil society organisation set up by Mr Kudrin.

“It would be a powerful message, because Kudrin is the only one in the top echelons with whom they will talk in the west and towards whom there is a certain trust.”

Mr Putin won triumphant confirmation as president, with 76.7 per cent of the vote in the March election. He pledged large-scale spending increases on healthcare, education and infrastructure — promises welcomed by the public as the Russian economy remains sluggish after two years of recession. Recommended FT View The increasing pressure of sanctions on Vladimir Putin

But analysts have warned that Mr Putin might struggle to deliver. “The new political cycle will unfold under the pressure of three unfavourable factors: continuing economic stagnation, international isolation of Russia, and the need for preservation of the regime after 2024,” wrote Kirill Rogov, an independent political and economic analyst, in an analysis of Mr Putin’s next term.

Indeed, Mr Putin’s administration has been embattled ever since the March election. It has been fighting western accusations over the poisoning of former Soviet double agent Sergei Skripal in the UK with a military-grade nerve agent, and over Moscow’s support for President Bashar al-Assad of Syria, even after his latest alleged chemical weapons attack on civilians.

US-led western forces embarrassed Mr Putin when they carried out missile strikes on Syrian army targets despite stern Russian warnings of retaliation.

Meanwhile, tough new US sanctions have caused turmoil in Russian financial markets, put tens of thousands of jobs at risk and forced Oleg Deripaska, one of the country’s richest men, to offer to cede control of aluminium company Rusal, a key strategic asset.

Apart from angry rhetoric from the foreign ministry and lawmakers, Moscow’s reaction has been restrained. People close to the government suggested Mr Putin was searching for opportunities for a deal with the west to ease the pressure. Listen: Europe faces twin threats from Putin and Orban

“In our internal policy decisions, we have never depended this strongly on external factors — it’s radical,” said a former cabinet official. “The government has been claiming that the Russian economy has adapted to sanctions, but the way the Americans are using sanctions now means you cannot adapt.”

Mr Putin is due to appoint a new cabinet after his inauguration on Monday. Dmitry Medvedev, who has led the government since 2012, is expected to stay on as prime minister but his powers over economic policy would be curtailed to give Mr Kudrin more control, said two other government officials.

A person in the presidential administration said talks over whether Mr Kudrin would become a member of the administration were continuing, and it was also possible that he could be appointed deputy prime minister. “If Kudrin appears either in the cabinet or in the presidential administration, we can conclude that they have agreed on a certain agenda for change, including in foreign policy,” said Mr Gontmakher.



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