Russia’s Medvedev agrees with ex-minister on need for reform

Alexei Kudrin file photo

(Interfax – September 30, 2016)

Russian Prime Minister Dmitry Medvedev has said he agrees with former Finance Minister Alexei Kudrin that the whole system of state governance in Russia should be changed – a further sign Kudrin is back in the corridors of power after he stepped down as finance minister in 2011 after a public disagreement with Medvedev.

Medvedev agrees

“I cannot but agree with Alexei Leonidovich Kudrin that for us it is important not only to achieve the target indicators in education, health care, road construction and urban development – in all spheres of people’s lives,” privately-owned Russian Interfax news agency quoted Medvedev as saying. He was speaking at the plenary session of the Sochi International Investment Forum on 30 September, which Kudrin took an active part in.

He went on: “That is, of course, the most important task. But we also need to change the whole system of state governance.”

“If we aren’t able to adapt it to resolve these tasks (achieve specific results in the economy and social sphere – Interfax), we won’t be able to achieve results,” he said.

Kudrin’s view

Speaking at the same meeting, Kudrin proposed putting off pay rises for public sector workers by two years. The pay rises were promised by President Vladimir Putin in his “May decrees”, the policy objectives he set out in 2012 when he took office for a third term as president.

“We understand that now in conditions of low oil prices, revenues have fallen and will rise very slowly. The question is how to increase spending on the most important sectors: education, health care, and building infrastructure,” he said.

Kudrin said this raised the question of public sector pay rises.

“I think wages should rise no slower than the rate of inflation, as this maintains people’s buying power,” he said, “but the ‘May decrees’ that concern the social sphere presuppose a higher growth in wages and doubling them in a number of specialities compared to the regional economy average by 2018,” Kudrin said.

Kudrin told Interfax that he had not yet discussed the idea of putting off the May decree pay rises with Putin.

“I will talk to him about that,” Kudrin said.

Kremlin responds

The Kremlin confirmed that the timetable for the May decrees remains unchanged.

“No decisions have been taken so far in this regard. And the president has so far expressed no other vision for the May decrees,” Peskov was quoted as saying, commenting on Kudrin’s statements.

Peskov said experts and economists had various views on this issue, but he added: “In general they boil down to the fact that the time frames need to be moved to the right.”

Kudrin back

Kudrin, a long-standing associate of Putin, now heads the Centre for Strategic Research, a think-tank close to the government.

He stepped down as finance minister in 2011 after a public disagreement with Medvedev, who was then president, over the country’s growing defence budget.

But Kudrin returned to the limelight in April, when President Putin said he would help shape a new economic strategy for the country. Soon after, Putin appointed him deputy head of his economic council.

On 21 September Kudrin was shown on state TV at a cabinet meeting chaired by Medvedev, and later meeting the prime minister one-to-one.

Kudrin said that, following Putin’s instructions, he was working with various ministries and agencies on an economic development strategy for the country for 2018-24. “I think the main goals of the strategy will be approved by the end of the year,” he said.

This latest exchange of views with Medvedev is further evidence that Kudrin is back as an influential player in the Kremlin. Yet commentators have questioned how likely the authorities are to accept his vision for far-reaching economic and political reforms.