16.05 Analytics

The Last Term’s Great Game of Solitaire: What the dismissals and appointments in government agencies indicate

Nikolay Petrov
Head of the Centre for Political-Geographic Research, Visiting Researcher at Stiftung Wissenschaft und Politik (Berlin)
Kirill Rogov
Director of the Re:Russia Project, Visiting Researcher at the Institute for Human Sciences (IWM), Vienna
Oleg Khokhlov
Re: Russia
Nikolay Petrov, Kirill Rogov , Oleg Khokhlov

By the end of his current presidential term, Putin will be 78 years old, an age at which his real managerial control will inevitably weaken. Therefore, in a scenario of inertia, the configuration of power that will have emerged by that time will largely determine the country’s post-Putin character. This lends special significance to the reshuffle in the upper echelons of the administrative apparatus announced in recent days. Re: Russia highlights the main trends in an overview of the announced appointments and dismissals.

Movements in the government demonstrate the growing role of the generation of ‘children’. These are both the actual children of Putin's associates, who are now close to the pinnacles of power, and their peers who have passed through the ‘school of Putinism’. The influence of the 45-55 year old rank of managers in Russian politics will sharply increase in the coming years. But, we should also expect the competition between these ‘children’ to intensify. The dismissal of Andrey Belousov from the post of First Deputy Prime Minister signifies a shift from the ideas of dirigisme and investment growth to a mobilisation-based ‘resistance economy’ subordinated to the dual task of mobilising the defence sector and resisting sanctions. His dismissal opens up the possibility of further consolidation of the position of Prime Minister Mishustin, who has been given the chance to take charge of economic strategy, gradually transforming from a technical prime minister into a political one. However, the promotion of Presidential Economic Advisor Maxim Oreshkin to Deputy Chief of Staff forms an alternative centre for economic decision-making. The most intense struggle, however, is currently unfolding around the Ministry of Defence. Prigozhin's conflict with the military organisation has reemerged in a new form. Arrests within the ministry and Shoigu's resignation have dealt a blow to the tandem between the latter and Chief of the General Staff Gerasimov, and has opened up opportunities for representatives of the security services to infiltrate the leadership of the military organisation. However, thus far, the situation can be characterised as a compromise from a position of strength.


Petrov (1).jpg
Nikolai Petrov
Visiting researcher at the German Institute for International and Security Affairs

Nomenklatura facade

On 11 May, Putin approved the new government structure, consisting of 10 deputy prime ministers and 21 ministers, and on 14 May, after a ritual discussion of the candidates in the State Duma and the Federation Council, he signed a decree on the new composition of the government. The logic of the reshuffle reflects the two-tier mechanism of Putin's personnel policy.

In total, the degree of government renewal — six people out of 31 — is the lowest in the past 15 years. However, it seems that the ‘generational’ factor, which experts spoke of in the run-up to the formation of the government, is indeed the Kremlin's focus. The appointments demonstrate the successful career trajectories of officials in line with the new nomenklatura logic of the ‘personnel reserve’, which involves the following career path: work in the apparatus of federal authorities — training in the 'personnel reserve' - governorship — return to the federal authorities in a political position (minister).

The government now includes four former governors: Anton Alikhanov (Kaliningrad Region, 38 years old), Sergey Tsivilev (Kemerovo Region, 63 years old), Roman Starovoit (Kursk Region, 52 years old), and Mikhail Degtyarev (Khabarovsk Territory, 43 years old), who respectively headed the Ministry of Industry and Trade, the Ministry of Energy, the Ministry of Transport, and the Ministry of Sports. Another new minister is Oksana Lut (45 years old), who became the Minister of Agriculture, having been the first deputy of the former minister Dmitry Patrushev (47 years old). Boris Kovalchuk (47), whose appointment as head of the Accounts Chamber (a separate federal agency that is not part of the government) occurred simultaneously with the government appointments, can be added to this list of ‘newcomers’.

In three cases, ministerial chairs were vacated due to the promotion of former ministers to deputy prime ministers (Denis Manturov, Dmitry Patrushev, and Vitaly Savelyev), demonstrating yet another level of nomenklatura success.

The changes at the deputy prime ministerial level are more modest in number, but significant. Denis Manturov (55) replaced Andrei Belousov as First Deputy Prime Minister. Manturov was appointed to the post of First Deputy Prime Minister after the war began, in July 2022, when it became clear that the blitzkrieg was turning into a protracted military confrontation that would require the large-scale deployment of military production. The new appointment indicates, among other things, that the military-industrial complex is and will remain a government priority. Dmitry Patrushev has replaced Viktoria Abramchenko, who was previously in charge of agriculture and real estate. Vitaly Savelyev (70), who became deputy prime minister for transport, is the only member from Putin's generation of St Petersburg friends (in the first half of the 1990s he was chairman of the board of directors of Rossiya Bank). Unlike Patrushev Jr., not only has he not chosen a successor at the Transport Ministry, which he has been in charge of since 2020, but he has already lost ‘his’ deputies some time ago.

Rejuvenation and nomenklatura careers are the facade of Putin's personnel policy.

Children and chaebols

However, this institutional façade and formal resemblance to the Soviet principle of nomenklatura growth are necessary but superficial elements, behind which lie the levers of informal connections.

Agricultural Deputy Prime Minister Dmitry Patrushev is the son of Nikolai Patrushev, a longtime Putin associate from the KGB-FSB. With his son's promotion to deputy prime minister, Nikolai Patrushev has finally moved to a pre-retirement position created for him as Presidential Assistant for Shipbuilding. The new head of the Accounts Chamber, Boris Kovalchuk, is the son of Yuri Kovalchuk, a major shareholder in Rossiya Bank, another of Putin's closest oligarchs and a media magnate close to him since his St Petersburg days. Energy Minister Sergei Tsivilev is the husband of Putin's great-niece, a coal industry businesswoman. The Tsivilevs were in the coal business under the patronage of another of Putin's closest oligarchs, Gennady Timchenko.

Moreover, among the appointees, there are not only actual children but also ‘virtual’ children. For instance, the new First Deputy Prime Minister Denis Manturov is the son of a longtime acquaintance and business partner of Putin's oligarch Sergey Chemezov, who has headed the state corporation Rostec since 2007, which consolidates the most significant industrial assets. Since his appointment as Minister of Industry in 2012, Manturov has embodied the consolidation of Chemezov's empire and the Ministry of Industry into a single administrative-industrial conglomerate, whose importance has greatly increased due to the war.

The new Transport Minister Roman Starovoit does not fall into the category of ‘children’, but prior to his appointment as the governor of Kursk, he was the head of Rosavtodor and is considered to be a man from within the circle of another Putin oligarch-builder, Arkady Rotenberg.

Thus, the new appointments not only rejuvenate the Russian executive branch, but increasingly turn it into a large family enterprise. The average age of the six new appointees is 51, while the average age of their predecessors is 62. However, perhaps more importantly, the majority of those who received new appointments and advanced in their careers (excluding Savelyev and Tsivilev) were born in the 1970s to the first half of the 1980s. This is the age of Putin’s own daughters and the children of his friends and associates from the pre-Moscow period of his career, that is, they are the children of those whom Putin brought to the leadership heights within the structures of Russian power during his first presidential terms.

The executive reshuffle creates the illusion of renewal and dynamism for an ageing and, as we now understand, indefinite-term Putin. But they also epitomise the processes of ‘succession’, or more precisely, the hereditary nature of the new elite. Whether this principle can make Putin's decrepit power machine more dynamic and effective remains a big question.

What roles the ‘children’ will play in the transition process will become clearer in time. But it is nonetheless interesting to recall that when Putin entered his second consecutive (and at that time considered his last) presidential term in 2004, he soon (in late 2005) appointed two of his long-time associates — Sergei Ivanov and Dmitry Medvedev — as deputy prime ministers. This parallel deputy premiership turned into an intriguing race of contenders for the ‘successor’ position. Today we see two simultaneous heirs from this generation of children who are now deputy prime ministers — Manturov and Patrushev. TThis, of course, does not yet mean that a similar competition will occur, but it would also be a mistake to underestimate the role of the deputy prime minister position in the Russian power hierarchy.


Kirill Rogov
Re: Russia
Oleg Khokhlov
Re: Russia

From dirigisme to mobilisation ‘resistance economy’

A key change in the government was the dismissal of Andrey Belousov, the First Deputy Prime Minister, who was responsible for the economic strategy of the cabinet.

Economist and former Deputy Chairman of the Central Bank Sergey Aleksashenko, in his blog Chronicle of a Murky Time, compares Belousov's role in the economic management system to that of Gosplan in the Soviet economy. ‘If we look at the level of deputy prime ministers, we see that there is a deputy for industry (Manturov), for agriculture (Patrushev), for transport (Savelyev), for communications and informatization (Grigorenko), for construction (Khusnullin), for social issues (Golikova)... Those who remember how the Council of Ministers of the USSR was organised will see an almost complete copy of how the duties of the deputies were divided (adjusted for time). What is missing are Gosplan and Gossnab (the heads of which were deputy government deputies by position)... The functions of Gosplan were performed by Andrei Belousov until today... Now Belousov is gone, and none of the remaining deputies is claiming his ‘Gosplan’ function, and nor can they due to a lack of understanding of macroeconomics in conjunction with the real sector.’

In addition to the operational state planning function, Belousov also claimed to be a strategist with his own concept of launching the ‘correct’ long-term growth. Just a few days before his resignation at the Russia Forum, he presented a ‘trajectory of success’ for the national economy, following which Russia could rise from 6th place to 4th place in the list of the world's largest economies in terms of purchasing power parity by 2030, surpassing Germany and Japan (this attractive but not very meaningful formula was included in Putin's May decrees). To achieve this, the economy needs to grow by 2-2.5% a year over the next two to three years, and by 3% annually starting in 2027.

According to Belousov, half of the contribution to this ‘acceleration’ could be provided by consumer spending. Additionally, an equal contribution would come from oil and gas exports and investments in fixed capital, which should become the key driver of acceleration. Belousov calls this the ‘supply-side economy’, implying that cheap money should trigger an investment cycle and production growth, which will eventually boost final demand. 

The Central Bank has been an ideological opponent of this concept. In his speech at the Russia Forum, Belousov stated that borrowed money would only become relatively cheap by 2027, when the key rate will fall from the current 16% to 6-7%. However, in his view, this should happen sooner, as the high rate is not very effective in combating inflation under current conditions. This topic is regularly developed by the Centre for Macroeconomic Analysis and Short-Term Forecasting (CMASTF), founded by Belousov. In a recent analysis of inflationary processes, CMASTF experts identified the weakening of the ruble, driven by a deteriorating trade balance, as the main cause of the inflation spike. This factor accounted for a 5.4 percentage point rise out of 7.4%. Conversely, the crucial role in slowing inflation was played not by raising the key rate but by the requirement imposed on exporters to sell at least 90% of their foreign exchange earnings. The high rate is ineffective as a tool to fight inflation, but it inhibits investment, according to the Belousov School. 

In any case, Belousov, a professional economist, had his own holistic concept for initiating economic growth based on internal incentives. This dirigisme was in line with the spirit of the pre-war period, when both business elites and the Kremlin saw energy exports as a reliable pillar of the economy and argued over the methods of redistributing its revenues within the domestic circuit. Belousov's position in this dispute was quite evident in his ideas on the withdrawal of ‘excessive’ revenues from big business, which were supposed to contribute to the launch of ‘investment’ growth, as well as in his constant criticism of the overly conservative policies of the Central Bank's leadership.

However, the transformation of the blitzkrieg into a protracted war amid extensive and long-term sanctions dictates a change in the dirigiste approaches towards a ‘resistance economy’. The concept of a ‘resistance economy’ was formulated in sanctioned Iran in the early 2010s and involves ‘self-reliance’, reduced dependence on external factors and a combination of state dirigisme and dynamism incentives for business, which should make the economy adaptable to sanctions. In the case of Russia, which is also engaged in a protracted war, this means a mobilisation resistance economy. That is, an economy that is simultaneously increasing military expenditures and replenishing its military potential, as well as resisting sanctions and seeking support for growth from domestic sources. A logical sign of this shift is that the post of First Deputy Prime Minister was transferred from the strategist Belousov to Denis Manturov, who oversees the military-industrial complex. In these circumstances, the manoeuvre of initiating investment growth is irrelevant as macroeconomic stability is more important.

Interests, agencies and ‘strategic coordination’

However, the difference between Belousov's approach and that of the circle of ministers and deputy prime ministers around Prime Minister Mishustin is not so much conceptual as it is managerial. Belousov's task was to implement an economic concept in which the state acts as a kind of ‘board of directors’ for economic development. However, the Russian economy differs from the Soviet economy, notably in that its real ‘map’ is two-layered: besides the sectoral breakdown reflected at the level of deputy prime ministers, it also includes a breakdown of business groups and semi-state-owned conglomerates overseen by ‘trusted friends’ of the president.

The established government team is a team of practitioners focused on the fusion and interpenetration of state and private business interests and the adaptability of economic policy to changing circumstances that ‘do not choose’. They are more like managers of the economy of semi-state-owned conglomerates, tasked with ensuring its relative stability in conditions of unpredictability in political decisions. Here, strategy should not stand in the way of tactics. And the principle embedded in the government structure of sectoral curators — deputy prime ministers — implies coordination of sectoral measures and actions not so much with a common government strategy, but with the interests of bureaucratic and business groups representing these sectors.

At the same time, Belousov's removal from the government leadership potentially strengthens Prime Minister Mishustin’s position. In 2020, he was given the prime minister's chair along with the first deputy prime minister, a strategist who had direct access to the president and had served as his economic aide for many years. This circumstance turned Mishustin into a technical prime minister whose government strategy was already set by his politically strong deputy. Now all the remaining space for ‘strategic coordination’ may be taken over by the prime minister and closed off. The absence of someone responsible for this function does not mean its complete disappearance; in the hands of an experienced administrator, it becomes a managerial resource.

However, the new design of the economic bloc of administration essentially implies another ‘deputy prime minister’. Putin's economic aide Maxim Oreshkin has been promoted to deputy head of the presidential administration, which presumably means that he will have his own department. In the Soviet (Brezhnev-era) power system, there was no economic department in the Central Committee — these issues were entirely under the jurisdiction of Prime Minister Kosygin. The economic department was created by Andropov, dissatisfied with the cabinet of ministers inherited from Brezhnev's protégé Tikhonov. Under Putin, an economic advisor or assistant traditionally wielded significant influence but had minimal apparatus and therefore did not become an independent centre of power in economic policy. As a deputy head of the administration, overseeing a specialised department or at least a significantly expanded apparatus, Oreshkin will likely become such a centre of power in economic policy.

Perhaps his function will include coordinating the economic policies of the government and the Central Bank (in this regard, it is worth remembering that it was Oreshkin's ‘rebuke’ in August 2023 that forced the Central Bank to urgently raise the key rate). In this case, he will become a tool for integrating the Central Bank into the executive branch. However, in any case, the strategic functionality left unattended after Belousov's departure will likely spark a struggle between Mishustin's apparatus and Oreshkin's new management in the administration.


Kirill Rogov
Re: Russia

The last term

The reshuffles announced by Putin in the last few days could well be described as sensational. They are changing the established balances in several important parts of the executive branch: the top echelon of the government, the leadership of the Ministry of Defence, the importance of which to a country at war can hardly be exaggerated, and the Security Council, which in Putin's system plays a role akin to an imitation of the Soviet Politburo. For Putin, who is conservative in terms of personnel, these are quite tectonic shifts. Suffice it to say that Patrushev has been secretary of the Security Council for sixteen years (since 2008) and Shoigu has been defence minister for eleven and a half years (since 2012).

However, these reshuffles are particularly significant due to their political context. The fact is that the beginning of Putin's next presidential term is a term during which he will be inevitably losing power. We are not talking about a coup or a crisis of the regime, as was commonly discussed last year, but rather about the natural crisis of Putin himself, who begins his next presidency at the age of 72 and will end it at 78. This is quite a critical age not only for an autocrat, but for any leader. It is a period when, for natural reasons, his control over processes decreases, and power gradually begins to shift to other places and emerging centres of power. At the same time, Putin may no longer have the time or desire to reshuffle the elite and bureaucratic balances that have emerged during this period.

In contrast, for example, to President Biden, who relies on established procedures and stable institutions, a personalist leader mainly relies on structures of trust that determine the real weight of various institutions and organisations in his power system, as well as on practices of distrust, through which he maintains competition among individuals, clans, and corporations. He also relies on his own analysis of not entirely reliable information from competing groups, and over the years has tended increasingly to delegate this analysis and the preparation of decisions to the inner circle and to ad hoc ‘agents of trust’. Although the working age in the modern world is increasing, managerial grip and the ability to perceive new trends are rarely maintained until such venerable years.

From this, it follows that the power configurations that will be built during the current presidential term are highly likely to become the channels into which Putin's power will gradually flow. The configuration announced in the current, recently announced appointments will definitely not be final, on the contrary, it will become the arena of a fierce struggle for influence and ‘protection of the perimeter’ of powers and resources. However, the structure that emerges as a result of this struggle will have much more weight and stability, gradually becoming the only instrument for the transit of power.

Prigozhin's shadow

The announced reshuffle changes the configuration of the economic bloc and opens a wide field for competition. But the pre-transition configuration of power will be built on two planks: resource-administrative and power. And the most intriguing events today undoubtedly revolve around the Ministry of Defence. Moreover, the main point of intrigue today seems to be not the resignation of Shoigu and the paradoxical appointment of Andrei Belousov in his place, but the forceful attack on the ministerial leadership. Two consecutive arrests — of the acting deputy defence minister and the acting head of the personnel department — are an extraordinary event even for the Putin regime. According to rumours from Telegram channels, several other deputy ministers have allegedly submitted their resignations. 

The attack on the Ministry of Defence is being launched under the brand of ‘fighting corruption’, but this version of events is likely to be dismissed immediately. Putin's regime is a regime of vertically integrated corruption, in which corruption is not an anomaly but an instrument of governance and loyalty, and it is also controlled and hierarchical. In other words, the regime's functionaries must ensure a certain level of efficiency in their position, while at the same time organising their well-being on a scale that is ‘appropriate’ for them and without encroaching on the money that has a clear and important purpose for their superiors.

At the same time, a systemic part of vertically integrated corruption is the demonstrative ‘fight against corruption’, presented to the public with the occasional spectacular arrests of ‘corrupt officials’. This ostensible ‘fight against corruption’ is, in turn, an important element of Putin's power politics and elite control. In this function, arrests become both a way of forcing resignations and a way of ‘clearing’ the department for the new boss and his appointees. The events in the Ministry of Defence resemble such a case.

The power attack on the ministry and Shoigu's resignation, in my view, should be seen as a direct continuation of the ‘Prigozhin story’ and the confrontations that unfolded behind its surface. What we know for sure is that, during the first months of the war, the ‘special operation’ in Ukraine had no official commander, and then General Surovikin became its face. Yevgeny Prigozhin, who launched a powerful campaign against Minister Shoigu and Chief of General Staff Valery Gerasimov, welcomed the appointment.

Despite this, Gerasimov was still appointed commander of the ‘special military operation’ in January 2023 and, with Shoigu's support, began to integrate the numerous military formations created ‘on the fly’ in the first year of the war under the General Staff. As a result, both Prigozhin and the ‘Wagner’ PMC disappeared along with its leadership, as did the chaos in the management of troops. Last summer, the Russian army successfully repelled a counteroffensive by Ukrainian forces, and this spring it went on the offensive. As a result, the Shoigu-Gerasimov nexus not only survived the turbulence of 2022 and early 2023, but also significantly strengthened its position. If the current offensive is successful, they may turn from ‘beaten dogs’ into real heroes.

Shoigu's resignation and the ‘purge’ of the Defence Ministry leadership is, first and foremost, a blow to this duo and their bureaucratic positions, as well as to the military (generals') organisation as a whole (General Kuznetsov, who was arrested, was in no way related to Shoigu's economic clan, was in charge of state secrets, and was appointed to his current position as chief personnel officer last May, when Gerasimov and Shoigu were consolidating their positions after the pressure from Prigozhin).

According to rumours in the Russian establishment (which were reported by Meduza and The Insider), Prigozhin's fight with the military leadership was backed by a group of former ‘adjutants’ - people from Putin's personal guard, led by Alexei Dyumin, who is allegedly a contender for the position of defence minister. And such a prospect seems extremely logical in the context of Putin's recent personnel policy. First, the army is probably the only power structure that is not under the tight control of ‘Putin's siloviki,’ i.e. people from the security services. And, in 2022, Putin is likely to face partial disloyalty from the military, who were not only not involved in the blitzkrieg plan, but also responsible for its failure. Second, as Nikolai Petrov noted in his article on Putin's wartime personnel policy (→ Nikolai Petrov: Children, Chaebols, and Adjutants), the children of Putin's long-time friends and adjutants are the two resources for rejuvenating Putin's own entourage, which find themselves in the circle of trust of the isolated Putin.

Meanwhile, a conflict with the army during a war is a risky venture. In the mid-2010s, Dyumin already ‘dabbled’ in the Ministry of Defence and even served as Shoigu's deputy for one month, after which he was suddenly sent to the Tula Region as governor. From this perspective, the current reshuffles appear to be a compromise from a position of strength. The leadership of the Defence Ministry is under the looming threat of new arrests. Shoigu is being moved to the highly prestigious post of Secretary of the Security Council and remains ‘in the loop’, but is being pushed away from Gerasimov and the ‘special military operation’. The economist Belousov, an outsider designed to control the military's financial demands, but not a ‘conqueror’ with ambitions to gain a foothold in the military establishment and bring it under his control, takes over as minister. At a meeting with district commanders, introducing the new defence minister, Putin stressed that there would be no personnel changes in the General Staff and no plans for them, thus confirming Gerasimov's authority. However, at the same time, Alexei Dyumin moved to the post of presidential aide in charge of the defence-industrial complex and the State Council, a position in which he remains a close threat to the army.

Of course, the cultivated insularity of autocracies forces us to engage in speculation. However, the conflict between the intelligence services and the military is a systemic factor, and the failed blitzkrieg plan, for which the military that had to take the blame, should only have intensified it. The question of who will answer for the failures and who will get the laurels of victory is the main political question posed by the war. And, the war is the structural core of Putin's new regime. Putin's main legacy, which will be inherited by his successors, is that of war. Therefore, no compromises can be made.