#2 - JRL 7189
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 publicly.
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 legislation.
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 election year.
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.