Russian minister exposes split in Putin's government

Just over a month before Russia's presidential elections, the hidden battle raging within the ruling class again spilt into the open yesterday, as one of Vladimir Putin's top ministers called for a change in foreign policy.

"In the nearest future we need to change our foreign policy goals to guarantee stable investment," said the Finance Minister, Alexei Kudrin, at an investment forum in Moscow. His call follows a series of clashes between Russia and the West over issues as diverse as Kosovo, US plans for missile shields in Europe, and the British Council.

Anatoly Chubais, who heads the state electricity monopoly, agreed with Mr Kudrin. "We really need to think about how much our foreign policy costs our economy," he said. Such aggressive behaviour in foreign policy was scaring off foreign investment, he added.

Although Mr Kudrin later toned down his words when talking to journalists, saying there had been no major mistakes in recent Russian foreign policy, his intervention in the foreign policy debate was a surprise. While most analysts agree there is a bitter battle going on inside the Kremlin as Mr Putin prepares to step down, it is exceptionally rare for ministers to criticise Kremlin policy publicly.

Mr Kudrin, who headed the Russian delegation to the World Economic Forum in Davos, Switzerland, last week, is seen as a liberal and an ally of Mr Putin's anointed successor, Dmitry Medvedev. He has faced difficulties in recent months, however, in what appears to be a concerted campaign against him by more hawkish elements for control over power and financial resources when Mr Putin steps down. Sergei Storchak, one of Mr Kudrin's deputies, was arrested late last year on charges of fraud and embezzlement.

It is unclear whether Russia's aggressive foreign policy really does put off investors. Foreign companies working in Russia report dealing with overly bureaucratic legislation and widespread corruption. But many Western investors are prepared to accept the risks of doing business in Russia because of the handsome profits that can be made.

"Investors are not philanthropists," said Leonid Radzikhovsky, a political analyst. "They are not going to pull out based on Russian foreign policy if there is money to be made here. But to really attract more investors we would need to change not foreign policy but internal policies – to ensure the courts are more independent and less people take bribes."

One Western businessman working in Russia since 2000 said: "As long as the overall political situation appears to be stable, investors already working in Russia will not be scared off. But if disputes such as that with the British Council continue to escalate, of course it has an effect on how people abroad perceive Russia."

Some analysts say that the divisions within the government are less about ideology and more about the battle for influence and money. "People are scared that Medvedev will re-divide the pie, so they are trying to defend their share," said Mr Radzikhovsky. "And attack is the best form of defence."

With Mr Medvedev all but guaranteed a crushing victory in the 2 March vote, speculation now revolves around Mr Putin's plans for when he leaves the Kremlin. He has already said that he could become Prime Minister and recent reports suggest he could combine prime-ministerial duties with the chairmanship of Gazprom, the state-controlled energy giant, which often seems to act as an arm of Russian foreign policy.

Mr Medvedev currently holds this position but will have to step down when he becomes President. The Russian daily Kommersant reported yesterday that sources inside Gazprom had hinted that its next chairman may be none other than the current President.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Engineering Project Manager

£35000 per annum: Recruitment Genius: This company is going through a period o...

Recruitment Genius: Senior Software Developer - Java

Negotiable: Recruitment Genius: This award-winning digital publishing solution...

Austen Lloyd: Construction Solicitor - City

Excellent Salary: Austen Lloyd: NON-CONTENTIOUS (0-2 PQE) - A rare opportunity...

Recruitment Genius: Senior Financial Analyst

Negotiable: Recruitment Genius: A Senior Financial Analyst is required to join...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness