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Dispatch: Putin and the Kremlin's Internal Struggle

Kremlin and Saint Basil'sEurasia analyst Lauren Goodrich examines the Kremlin's internal struggles following the resignation of Russian Finance Minister Alexei Kudrin.

Russian President Dmitri Medvedev is attending military exercises in the Urals today. At the same time the outgoing president's office is publishing a flurry of statements on how the president firmly stands behind increased defense spending. The statements are meant as a jab at Russian Finance Minister Alexei Kudrin who tendered his resignation yesterday after a very public and bitter fallout with Medvedev.

There have been many disagreements between Medvedev and Kudrin over the past few months. The largest and most important has been that Medvedev's circle does not agree with how Kudrin has implemented the privatization and modernization sister programs. Medvedev's circles want the programs to actually be more liberal in order to bring in more finance and foreign firms into the country. However, Kudrin is trying to balance the programs with national security and the need to ensure that whoever does come in and what money does come in isn't going to undermine the Russian government.

But Medvedev's camp has spun the story interestingly, from being about a disagreement over the sister programs to a disagreement about expanded defense spending. Medvedev's camp claims that Kudrin does not agree with a 1.3 percent increase in the defense budget. But the story doesn't quite hold water. An increase of 1.3 percent is really nothing when you're talking about a Russian defense budget that is so large and also in a time when the Russian government has more money than it knows what to do with. But what Medvedev is trying to do is trying to show he is defense friendly in order to try to sway the security and defense circles toward him at a time when the Kremlin camps are all falling apart.

Over the past decade the Kremlin has been made up of two main factions. There are many other fringe groups and individual personalities but the two main factions are the siloviki and the civiliki. The siloviki are the more prominent ones ­ the ones everyone knows. They are made up mainly of KGB, FSB and other security personalities. Now the civiliki are the ones that Medvedev and Kudrin have traditionally belonged to. They are the economists, the financers and they have more of a pro-Western leaning in their policies and agenda. The civiliki have traditionally been a more fragile group in that their agenda always comes second to the siloviki. National security comes first in Russia ­ plain and simple. But the civiliki got a boost in 2008 when one of their members, Dmitri Medvedev, became president ­ allowing them to actually start moving their agenda forward inside the Kremlin.

Now that Putin is returning to the presidency next year the civiliki is worried that their agenda is no longer going to have as much of a foundation inside the Kremlin. This isn't exactly true but the fractures and fissures within the civiliki are starting to rupture none the less.

This comes at a time when the other group, the siloviki is also in disarray. The siloviki's leader, Igor Sechin, has had a lot of health issues this year, which has forced him to step back from the leadership role, though he refuses to allow anyone else to step into the leadership role, leaving the group leaderless. So in short both groups are in disarray.

This is both good and bad for Putin. It's good in that having the groups focus on battling each other and battling within their own group prevents any of them from rising up against anything Putin is wishing at this moment. It's bad in that Putin has a very lofty agenda he's arranging when he comes back in as president next year. Ranging from defense, security, military, economic, financial, social, etc. in which he all wants to achieved in building a stronger and a powerful Russia in years to come. Putin cannot do this if his Kremlin is in disarray, if the people who are supposed to be implementing these new programs and his agenda are too busy fighting each other. So in the next year Putin is going to have to find a way as president to get the Kremlin civil war back under control.

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