The Rise of the Russian Empire: Russo-Armenian Relations

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Postby Armanen on Thu Sep 06, 2007 4:21 am


Stratfor ... d=Analyses
Sept 4 2007


As different factions within the Kremlin struggle for position in
the lead-up to Russia's presidential election, new faces are emerging
among the ranks of power players. Among these rising stars is Deputy
Prime Minister Sergei Naryshkin, whom Russian President Vladimir Putin
appears to be grooming for the premiership. However, Naryshkin is not
the first new face Putin has brought in because of his neutrality,
and as the Kremlin battle grows even nastier, he could fall into the
power struggle as well.


As Russia's presidential race heats up, some unfamiliar actors are
playing larger roles in Russian President Vladimir Putin's continuing
agenda for the country's resurgence. The different Kremlin clans have
been relentlessly working to carve out and secure their places in the
changing power balances that are emerging, with special attention to
the most coveted positions such as the premiership and the Economic,
Finance and Energy ministries. It has become more evident that the
battles inside the Kremlin are growing fiercer.

Furthermore, Putin is having difficulties balancing his larger agenda
for Russia with the competing interests of Russia's economists,
military, commodities companies and energy behemoths. When he became
president in 2000, one of Putin's chief goals was to reverse most of
the economic and political free-for-all from the Boris Yeltsin era.

Putin has tirelessly and mercilessly consolidated each sector of the
government and industry that had exploded into countless different
interests and businesses over the previous decade. For the most part,
Moscow has moved the country's vast economy and those companies that
run it back under Kremlin ownership, control or influence.

However, this also has put politicians with few managerial or technical
skills in charge of many sectors of the Russian economy and created
competing interests within the government. The best example of this is
the fierce battle between Russia's state-controlled natural gas giant
Gazprom and oil giant Rosneft. Each is determined to undermine the
other in attempts to secure energy assets and influence, and recently
this battle has flooded into the political arena where each company is
looking to secure its expansion by getting its people into top Kremlin
positions. Most wealthy and influential Russian enterprises are making
similar attempts to tip the balance of power. Almost every inner-circle
member and top government official can be linked to one industry,
company or sector -- which has led to many political decisions (as
opposed to economic decisions) being made not only for the sake of
the state, but also for the sake of individual state oligarchs.

As the battle continued this summer, a not-so-well-known player has
emerged and taken several exceptional positions, showing he is one of
Putin's picks for the future of the Kremlin: Deputy Prime Minister
Sergei Naryshkin. Naryshkin has become one of the politicians Putin
trusts most; he served in the KGB before the Soviet collapse and
studied with Putin in the KGB's elite school. Also like Putin,
Naryshkin worked in the St. Petersburg regional government in the
1990s before being catapulted into the federal government along with
most of the "Petersburgers" when Putin took office. Naryshkin has
worked with almost every major power broker in the Kremlin's higher
echelons. He has been a Rosneft board member, an adviser to Gazprom,
chief of investment for Promstroibank and a board member for several
military shipbuilding companies, aside from his current positions
as deputy prime minister under Mikhail Fradkov and chairman of the
Channel One television station. Naryshkin managed to do all this
without pledging allegiance to anyone but Putin.

While preparing for a power transfer in spring 2008, over the past
few months Putin has been grooming Naryshkin so that the deputy
prime minister can represent Russia's military, economic, foreign and
domestic policies. Naryshkin is now in charge of Russia's economic
relations and activities in Commonwealth of Independent States member
countries, the European Union and the Far East -- meaning he gets to
decide which projects move forward, mediate between competing companies
and have the final say in financing for projects. He is in charge of
all the preparations -- economic, construction, security and guest list
-- for the 2012 Asia-Pacific Economic Conference in Vladivostok. He
also has been named head of Russia's state holding company in naval
construction, United Shipbuilding Corp., and rumors are swirling that
he will soon be named to First Deputy Prime Minister (and expected
presidential successor) Sergei Ivanov's position as head of the War
Industries Committees, Russia's military-industrial commission.

Long lists of highly influential Kremlin power brokers -- including
Anatoly Serdyukov, Viktor Khristenko, German Gref, Alexei Kudrin,
Dmitri Medvedev and Ivanov himself -- were expected to take these
positions before Putin placed Naryshkin in them instead. Though
many meaningless positions are dealt out in Russia, Putin has given
Naryshkin the green light to make decisions in his new roles --
something very rarely done.

Moreover, on Aug. 31, Naryshkin took up some of the duties usually
given to a foreign minister as he held two-day talks with Azerbaijan.

In the past, Naryshkin has only discussed second-tier economic issues
abroad, but in Baku he was sent with a slew of issues to tackle,
including missile defense, energy strategy and the conflict with
Armenia. Naryshkin also was tasked with telling Azerbaijani President
Ilham Aliyev that Russia is fed up with Azerbaijan's flirtations
with the West and attempts to get other energy-rich nations such as
Turkmenistan to join any projects that lack Moscow's approval.

Beneath all these changes of position and power is the rumor that
Naryshkin is being groomed to take the coveted Russian premiership.

The reason Putin has given Naryshkin, rather than the usual players,
so many prized positions is that Naryshkin is considered neutral;
he does not belong to any specific clan inside the Kremlin yet.

Neutrality is becoming rarer as Russia's energy companies, metals
groups, military-industrial complexes and diamond firms fight for power
with increasing ferocity. Putin's thinking is that if Naryshkin can
remain neutral, he will do what is best for Russia and its overall
resurgence instead of what is good for one industrial, economic or
political group.

Of course, many of the Kremlin's elite who began as neutral -- like
Ivanov, who is now Rosneft's champion, and Fradkov, who is the central
banks' supporter in the Kremlin -- have been snared quickly by one
group or another. Just as summer began, Kremlin bulldog and Putin's
closest adviser Vladislav Surkov told the media to refrain from sharp
criticism of Naryshkin and told companies to refrain from courting him
until he was settled in his new positions. However, Naryshkin already
is receiving propositions, especially from energy giants Gazprom and
Rosneft, which see him as the deciding factor in the outcome of their
fierce competition in Russia and beyond. With so many influential
positions on his plate, Naryshkin will become the No. 1 target in the
struggle for power -- and all the while Putin will expect him to keep
order and balance in an increasingly volatile Kremlin.
It's a custom of the human condition for the masses to remain ignorant. It's what they do. In fact, that IS how "the peace" is kept. Whatever democracy we have here is a spectator's sport.
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