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RUSSIA INTELLIGENCE Politics & Government N°76 - April 24 2008 Published every two weeks / International Edition CONTENTS KREMLIN P. 1-3 Politics & Government c Dmitry Medvedev faces a « Putinian » steamroller KREMLIN c Dmitry Medvedev faces a We would like to believe in the “soft” version of the transition in the Kremlin according to which Dmi- « Putinian » steamroller try Medvedev and Vladimir Putin agree completely and especially on the allocation and geography of the ALERTS power between the President of the Federation and “his” Prime minister. But the truth requires acknow- c 5th generation combat air- ledgement that the ground between the two men is not as pacified as they would like us to believe. From craft : Brasilia enters the race many signs that we have decyphered in this edition, it can be seen that a quiet struggle is underway, that FOCUS it is more the work of “Poutinian” elements of Russian power and that they aim at restraining Dmitry Med- c Medvedev-Putin : who will vedev in a sort of institutional and political collar that he could have trouble liberating himself from, at control the regions ? least in the first months of his presidency. LIBYA c RZhD's bountiful harvest The fact of elevating Vladimir Putin to the head of party that he is not a member of, United Russia, is Russia" the last of the “innovations” from those close to the President to install the future Prime minister in a sta- c Balkans : a second Russian tus of “national leader” and to limit the President in the role of super Foreign affairs minister abandoned wave in energy and metals to internatioal summits and protocol encounters. In the wings, other “reforms” are under preparation, in- cluding some treating a subject that was up to now virtually taboo in Russia : the territorial partitioning P. 4-7 Business & Networks of the Federation. For several years, we have witnessed some regrouping of regions between themselves, OG SOCHI-2014 notably in the north and in Siberia. This strategy should continue and even be accompanied by new ini- c Alexandre Tkachev and Oleg tiatives such as the creation of a dozen economic “super regions”, led by “super governors” having the rank Deripaska get Semyon of vice ministers, therefore members of the government and depending on the Prime minister (read page Vaynshtok's scalp 2). In a related domain, the role of the “high representatives” of the President could evolve in order to TRANSPORT place them under the more direct control of the government.We can well perceive the underlying inten- c East Line and the tions of these projects, not all of which may see the light of day nevertheless : to change the balance of po- Domodedovo airport, the new battlegrounf of the clan war wer between the President and the Prime minister without having to resort to modifications in the consti- tution. The major reform announced in the autumn of 2004 by Vladimir Putin, the suppression of gubernatorial ALERTS c Alitalia : Aeroflot in reverses elections by popular vote, had as a goal the replacing of the regional leaders of the Federation under the direct control of the Kremlin. The entourage of the outgoing President apparently nourishes the ambition MINING c Yakunin, Makhmudov and of achieving a new transfer and to reposition the governors in the hands of the governmet and not the pre- Dmitriev in pole position for sidency. It is hard to believe that Dmitry Medvedev could allow himself to be stripped in this way, unless the privatisation of the Udokan he automatically renounces to exercise his full powers bestowed on him by the constitution, which up to copper deposit now his speeches have rejected. FOCUS c Potanin-Prokhorov finish by In other domains, there is no evident truce in the clan wars , even within a few days from the introni- separating on good terms sation of Dmitry Medvedev. A few “hot” issues are waiting on the desk of the future President that illus- trate the ferocious battle already underway for several months and which we have extensively related, between the “Cherkesov” clan and the “Sechin” clan. The latest battleground to date concerns control of P. 8 Regions & CIS the airport of Domodedovo (read page 5) that the “Sechinians” would like to capture from the “Cherke- FOCUS sians”, the brutality of the offensive has, however, created a certain emotion in Russian business circles, c Chechnya : Kadyrov wants to eliminate Yamadaev who have already seen many others. We could also cite the conflict that opposes Anatoly Chubais of RAO UES against the inevitable Igor Sechin, as chairman of Rosneft, concerning the privatisation of the energy company TGK 11, which Chubais intends to carry out fully and which Sechin opposes before the courts. Dmitry Medvedev has been presented the issue, put under notice to decide between the two, and decided SUBSCRIPTION Print Edition to create...an arbitration commission, a prudent step that is all the more surprising since it involved two (23 issues, airmailed overseas) state companies whose managers should normally be subject to his orders... And we could also cite the €770 TTC last developments that occurred at the head of the committee charged with the preparation of the winter Olympic games of 2014 in Sochi (read page 4). The Web Pack (Print Edition + PDF + archives acess) This agitation, at the same time institutional, political and commercial, is a sign of a certain anxiety in € 880 TTC the midst of Russian power, about the way the distribution of power between the President and the Prime minister will be organised. Certain Russian political scientists or those who claim to be do not hesitate to The Premium state that the “duo-poly” is an assurance of stability and balance. At this hour, it hardly seems to be and Subscription (Print Edition + PDF + access instead there are perceptions of the establishment of a “counter-Kremlin” around Vladimir Putin without to all the website contents) anyone knowing exactly what ramparts Dmitry Medvedev will erect against those who already want to chal- € 1200 TTC lenge his power. d www.russia-intelligence.fr RUSSIA INTELLIGENCE Politics & Government ALERTS cc FOCUS 3 5th generation combat aircraft : Brasilia enters Medvedev-Putin : who will control the race Following India (Russia Intelligence n°64 the regions ? of october 25, 2007), it is the turn of For several weeks, initiatives, discussions and rumours have multiplied in Mos- Brazil to sign a cooperation agreement cow concerning the possible recomposition of relations between the central po- for development of the 5th generation wer and the “subjects of the Federation” with, as an underlying theme, the ques- combat aircraft (PAK-FA). The text was tion of power-sharing between Dmitry Medvedev and Vladimir Putin after completed April 15 during the visit to May 8. Moscow by the Strategic affairs minister Roberto Mangabeira Unger. Brazilian Two verticals of power ? The start of the intrigue goes back to the month of experts consulted by Russia Intelligence March. The young deputy from United Russia Pavel Semyonov introduced an underline that no details were provided amendment to a text of an apparently anodine law on the status of civil concerning a possible financial participa- servants.”Blown up” by the presidential administration, the amendment lifts the tion by Brasilia. prohibition against the combination of the status of elected official and federal ci- According to them, Roberto Mangabeira vil servant. It became quickly apparent that the object of this legislative cosmetic Unger — an intellectual member of the was to confer to the governors (or a certain number of them) the authority over Harvard Law School faculty — fre- the representations of the federal ministries in their regions (often considerably quently assumes the role of “ideas mi- more important in staff than the regional authorities themselves). In this case, nister” but does not hold the purse- the governors would become links in the governmental chain, which would, in fact, strings. He is nevertheless the author of place them under the authority of the Prime minister. the Defence White book that should be published next September. According to Coincidence or not, this episode came at the same time as several leaks in the our sources in Brasilia, a commitment in Moscow press relating a possible evolution of the role of the high presidential re- favour of the PAK-FA would strengthen presentatives (“Polpredy”) in the federal districts. Their primary mission (the har- Sukhoi’s chances of placing its Su-35 monisation local legislation with the federal constitution) being accomplished, while awaiting the full production of the they could see themselves being assigned some new tasks, in particular in the so- 5th generation fighter (probably by cio-economic domain. A slide that would distance them from their initial role as 2015). In the shorter-term, the outcome sub-prefects of the Kremlin. In early April, the deputy Sergey Pekpeev, a member of the Brazilian Defence ministry call for of the commission on Federation affairs and regional policy, even let it be unders- tender on combat helicopters will pro- tood that the “polpredy” might in the future be attached to the Prime minister. vide a first indication. The Mi-35M is well-placed, even if Agusta in recent Dmitry Kozak’s new plans. The Regional development minister is days has waged an intense lobbying naturally very active in the current debates on federal reforms. He campaign to get the prize in extremis. presented on April 10 a draft aiming to set up a new method of eva- luating the work of governors. In principle, nothing shocking, ex- 3 The Bushehr power sta- cept that up to then it was the role of the presidential administra- tion : Baku steps in tion (which is more logical since after the reforms of 2004 the head While relations between Moscow and of State had the power to dismiss the heads of regional authorities).
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