MEDVEDEV’S CHALLENGE TO PUTIN….AN EVOLVING STORY
SPIEGEL ONLINE
Dissident Turned Technocrat
Medvedev Takes On Putin with Governor Appointment By Matthias Schepp
Russian President Dimitri Medvedev has named a former opposition leader as the governor of the region of Kirov Oblast. The appointment is a test of whether Medvedev can assert himself against his powerful prime minister, Vladimir Putin.
Nikita Belykh has a difficult relationship with the armed forces. But on Defender of the Motherland Day, Belykh, who is governor of Kirov Oblast, located some 800 kilometers northeast of Moscow, attended a ceremony honoring the country’s war veterans.
Russian oblasts are similar to federal states in Germany and the US, and Belykh acts as the Kremlin’s representative in Kirov. On this key date in the Russian calendar, Belykh was clearly unhappy with his duties. The normally eloquent governor seemed ill at ease as he read his speech off a piece of paper.
On the stage and behind the lectern, eight soldiers stood to attention, their parade uniforms sparkling under the spotlights. They too were uneasy with the situation. The military considers Belykh a weak liberal, and the applause was suitably muted. For Belykh the appearance was therefore a foray into enemy territory — until recently, he was a vociferous opponent of the government.
Barely two years ago, policemen in gray riot gear arrested Belykh during a demonstration. At the time he was the leader of the opposition Other Russia coalition together with Garry Kasparov, the former chess world champion and a diehard critic of Prime Minister Vladimir Putin. And yet a year ago President Dimitri Medvedev appointed Belykh to be governor of Kirov Oblast. Belykh was just 33 years old.
Clear Signal
Medvedev’s decision to appoint an opposition leader and former dissident was a clear signal. Although Medvedev’s mentor and predecessor, Vladimir Putin, wants to keep the opposition in check by any means, Medvedev hopes to win them over to help push through his modernization policies. But Belykh’s meteoric promotion annoyed both the Kremlin old guard and local elites, who had made themselves comfortable in Kirov, creating a kind of mini-Soviet Union in which the roads were still named after Marx and Lenin.
Belykh needed allies. He brought along Maria Gaidar, the 27-year-old daughter of former Prime Minister Yegor Gaidar, the architect of Russia’s market economy, who led the first reform-oriented cabinet under President Boris Yeltsin.
Maria Gaidar also made a name for herself through a bold protest. Infuriated by Putin’s decision to cancel gubernatorial elections, she abseiled off a bridge within sight of the Kremlin and unfurled a banner that read “Give us our elections back, you bastards!”
Now that Gaidar is responsible for health and social affairs in Belykh’s cabinet, she must learn to govern. Average monthly incomes in Kirov are about €200 ($272), and 20 percent of its inhabitants live under the poverty line. Although she visits hospitals and has announced the opening of the first privately-run pensioners’ home, both Maria Gaidar and her boss are despised by the country’s hawks.
Testing Ground
President Medvedev is backing his young Turks. Although his predecessor, Vladimir Putin, mainly appointed high-ranking members of the intelligence service as governors when he was calling the shots at the Kremlin, most of the 23 governors appointed by Medvedev have been young, business-friendly technocrats.
What’s more, Medvedev made a point of visiting Belykh, the most controversial of his appointees, last year. No Russian leader had traveled to distant Kirov since 1824 — no tsar, no communist secretary general, no Russian president.
The region has thus become something of a testing ground for Medvedev’s leadership. It will show whether he can push through the modernization plans he has put at the heart of his presidency. With two years to go before the next presidential election, many are wondering if he can build up his own power base and finally step out of Putin’s shadow. Can his ideas for reform and the battle against corruption and alcoholism be transferred from Kirov Oblast — population 1.4 million — to Russia itself, which has almost exactly 100 times as many inhabitants?
Kirov and its ageing defense and agricultural industry are a microcosm of the country as a whole. “If I fail here, my career is at an end,” says Belykh, who has already confided to friends that he is toying with the idea of moving into the Kremlin in about 20 years’ time.
Blamed for Suffering
Belykh was recommended to Medvedev by Anatoly Chubais, the man who privatized large swathes of the economy after the breakup of the Soviet Union. Putin’s inner circle, most of whom are nationalist patriots, despise Chubais as virulently as they do Gaidar. Conservatives blame Yeltsin-era reformers for the widespread suffering of the 1990s as well as Russia’s decline from a global superpower on a par with the United States to merely a large country with primarily regional influence.
Even so, Medvedev was able to push Belykh through against Vladimir Grodetsky, the head of a state munitions company and the candidate favored by Putin and his supporters. Grodetsky’s company is one of the main shareholders of the armaments firm Molot (“Hammer”), which is based in Vyatskiye Polyany, a town of 38,000 inhabitants on the southern edge of Kirov Oblast.
Molot was once a shining example of Soviet manufacturing. During World War II, some 2 million Shpagin-brand submachine guns rolled off its production lines. Every Russian child knows them from old war movies. The plant also produced the legendary Kalashnikov assault rifle. At the time the factory was shrouded in secrecy, partly because it was so successful. Today its bosses are more concerned with concealing its decline.
Russia’s armed forces have shrunk by about 70 percent since the Soviet era. As a result, the military can no longer afford to buy as many weapons as the industry would like to sell, meaning production at Molot and elsewhere has been wound down.
‘Our Stores Are Like Museums’
Only a few weeks ago, some 1,500 Molot employees took to the streets waving empty cooking pots and shouting, “We’re starving!” Workers at the plant have been waiting to be paid for eight months now, and shopkeepers in the city’s stores complain that their sales have slumped by between 20 and 50 percent. “Our stores are like museums,” says one exasperated woman. “People come to look, but they can’t afford to buy anything.”
Molot is headed jointly by Grodetsky and another man with close ties to Putin: Sergei Chemezov, who has known the Russian premier since the days when they both worked for the KGB in East Germany. Putin commissioned his friend to build up a business empire, which now contains 439 companies, under the umbrella of the state holding company Rostekhnologii.
However Chemezov has proven as mediocre a manager as he was a spy, and he has been forced to close or pare down one company after another, including Russia’s largest auto manufacturer, AvtoVAZ, whose management had to sack more than 25,000 employees when auto sales fell by almost 50 percent.
Sweeping the Streets to Make Ends Meet
Medvedev spent months lobbying against Chemezov. The president has demanded far-reaching privatization as well as the “reform or liquidation” of the massive but ineffectual state holding companies created by his predecessor.
Molot’s Web site still sings its own praises as a “stable company” that is “developing successfully.” Even the city’s mayor will only admit to “3 percent unemployment”, although at least a third of the working population is jobless or makes ends meet by sweeping the streets for a few hours every week. And because regional authorities only ever send massaged statistics to Moscow, the actual rate of unemployment in Russia is far higher than the official figure of 9.2 percent reported in January.
Belykh is well acquainted with these practices. That’s why he refuses to believe the overoptimistic projections of his predecessor, who claimed that industrial output in Kirov Oblast would increase fivefold by 2020, as stipulated in an unrealistic plan drawn up by Putin.
Stemming Corruption
The governor sits in room 512 of the governmental building. On his desk there are three mobile phones and a bowl of dried fruit. Dressed in black jeans and a black sweater, Belykh summarizes his first year in office: He has improved the roads, and stemmed corruption. He has diverted funds from top-class athletes to recreational sports and built new sports centers. He has slashed by 90 percent the budget his predecessor had used to subsidize the local media in an attempt to guarantee himself a favorable press.
Belykh also demonstratively auctioned off his predecessor’s luxury official car. He donates his own salary to homes for orphaned children — after all, he doesn’t need the money. Before becoming governor, Belykh studied economics and earned so much trading shares that in 2008 he paid the equivalent of €1.7 million in tax on his dividends alone.
But powerful forces have massed to oppose him. Just like Medvedev in Moscow, Belykh has too few followers among the apparatchiks. Just like Medvedev, he is forced to deal with a parliament dominated by Putin’s United Russia party. Just like Medvedev, he has, on the one hand, a hard time meeting the high expectations of the small democratic minority and therefore not disappointing his allies, while on the other hand shaking the conservative majority of the population — which expects the state to remain strong — out of its lethargy.
And just like Medvedev, he can’t be certain that his own ranks aren’t already infected by the scourge of corruption, which is consuming Russia from the inside. One of Belykh’s closest associates was arrested in February. It is claimed he pocketed 5 million rubles, the equivalent of about €120,000, from trading in wood. “If this is true, he must face the full might of the law, even though he is my friend,” Belykh has said. “But if it is a plot to discredit our reform plans, I will fight it.”
Taking on the Oligarchs
Just like the Russian president in Moscow, the governor of Kirov Oblast has to deal with oligarchs who try to set the rules of political decision-making. His greatest victory so far has been against the most powerful of these men. It involved the opening of a branch of the German retail chain Metro in Kirov city.
During the tenure of Belykh’s predecessor, Nikolai Shaklein, a member of Putin’s party, Metro bought a site in the western part of Kirov city shortly after the area had been designated as construction land. It planned to build a store on the site. Metro was forced to buy the land from a private company run by the then deputy governor. Deals such as these at the interface between government and business have earned certain individuals in Russia millions.
But once the sale had been concluded, the authorities dragged their heels over the relevant permits. That’s because Metro’s plans annoyed another behind-the-scenes wheeler-dealer from Putin’s party. That man was Oleg Berezin, the richest man in Kirov.
Berezin, 47, may be a simple member of the regional parliament, but he is so powerful that the mayor of Kirov city, which has a population of 450,000, pays frequent courtesy visits to the oligarch. And the mayor waits patiently in an anteroom to be granted an audience. Before the election, businessman Berezin handed out a brochure listing the candidates he approved. The duly elected representatives thanked him for it.
Decisive Changes
When, as part of Medvedev’s anti-alcohol campaign, Governor Belykh attempted to pass an act that would have prevented the sale of spirits between 11 o’clock at night and 7 o’clock in the morning, the parliamentarians threw it out. Coincidentally or not, Berezin is the main shareholder of the largest vodka factory in the region.
Until Metro arrived on the scene, Berezin had a monopoly on the local food stores. Using his contacts to people close to the former governor, he succeeded in delaying the start of construction of the Metro store.
However, when Belykh entered office, things suddenly began moving quickly. The new Metro outlet opened its doors on Oct. 7 last year. Since then, another Russian chain of supermarkets has also opened a branch in the city, and it plans to open as many as 20 stores.
“We can’t hope to make decisive changes unless Russia itself changes, and the state ensures fair competition and creates good conditions for investment,” says Maria Gaidar, Belykh’s deputy. “But the city is unlikely to become a Silicon Valley because our best minds are still leaving.”
Needing Luck
When Medvedev visited Kirov last year, Gaidar and Belykh took him to an ultramodern blood plasma factory currently under construction. It is hoped this will supply the entire country with plasma within two years so that Russia is no longer dependent on expensive imports. Although no more than the superstructure has been completed, there are great aspirations for the factory.
They then visited an arts-and-crafts workshop, a rather unprofitable business which serves as something of a symbol of the parlous state of the economy at the present time. Even so, the president personally reached into the pot of clay and tried to fashion himself a mushroom. “Perhaps it’s a lucky mushroom,” a member of his delegation quipped.
Lucky or not, Medvedev will need all the help he can get if he is to push through his reforms and successfully defend his place in the Kremlin against his powerful prime minister.
Translated from the German by Jan Liebelt
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