Russian reform: Slaying his own dragon

Vladimir Putin has identified bureaucrats as his new foe

DURING his first term in office, Russia's doughty president subdued one formidable opponent: the country's business elite, the rich and powerful “oligarchs”. Now he is taking on an even more intractable foe - the foot-draggers, time-servers and other rogues who notionally work for him. That, at least, is the version of history that Vladimir Putin is propagating.

True enough, the oligarchs did have great influence over Mr Putin's predecessor, Boris Yeltsin. A long-running investigation into Yukos, an oil company, is seen as punishment of its now-jailed boss, Mikhail Khodorkovsky, for getting too big for his boots during the Yeltsin years. This week there were signs of an imminent peace deal when Yukos (which could face bankruptcy after the government hit it with a $3.5 billion tax bill, and a court then froze most of its assets) invited Viktor Gerashchenko, a former central bank governor, to be its chairman. Whatever the outcome of the Yukos affair, the energy sector as a whole is certain to face higher taxes: the Duma, egged on by Mr Putin, has just set rates for a windfall tax on oil companies' profits which could rake in an extra $3 billion in revenue in 2005.

So much for the battle with business. But the fact Mr Putin now presents the bureaucracy as an enemy might seem strange; after all, it has grown under his rule, particularly in his own presidential administration. But more than once recently, he has railed against bureaucratic obstructionism. Shortly before his re-election in March he fired Mikhail Kasyanov, the prime minister, who was not only the oligarchs' biggest ally but an obstacle to a long-planned administrative reform. With Mr Kasyanov gone and the plan's main architect, Dmitry Kozak, installed as cabinet chief of staff, it may be possible to proceed as originally hoped.

Various ministries have already submitted plans for staff cuts, due to start taking effect after Mr Putin's re-inauguration on May 7th. Mr Kozak himself announced this week that he will fire more than a quarter of the 1,000 staff at the White House, the government headquarters. Across the board, the government should shrink by 20%. The money saved will go towards multiplying senior officials' salaries (Mr Putin's included) by anything from two to 12 times, to reduce temptations for corruption. The government is being rearranged along lines first thought up in 1997 under Mr Yeltsin: fewer ministers and a separation of powers between ministries (which set policy), “agencies” (which implement and manage) and “services” (which enforce and regulate).

But how reality will match the plans is still anyone's guess. INDEM, a think-tank that studies corruption, say that the ministries will be in control of the agencies and services instead of equal to them as was envisaged in the 1997 plan; this will undermine the idea of accountability. To take one example - with the statistical service subordinate to the economics ministry, will it really resist the temptation to massage economic data? And will officials really be fired, or merely re-designated in a personnel-juggling trick?

Moreover, a reallocation of roles inevitably means fights for the choicest ones. Officials within the culture and media ministry are already slugging it out over which department gets the job of granting broadcast licences, an enormous lever of power. Such battles - a predictable consequence of dismantling the old structure before deciding what to put in its place - could last for months; and there is no knowing what weak links and special interests the new system could end up with.

The toughest job of all will be to overhaul the so-called “power structures”: the police, prosecutors and army. So far, there are no concrete proposals, other than Mr Kozak's stated intention of reducing the powers enjoyed by prosecutors. As for the army, the generals blocked military reform during Mr Putin's first term, and the ensuing deadlock remains unbroken.

But there was one hint this week that Mr Putin is not completely beholden to would-be skull-crackers. He suggested watering down a draconian bill now going through parliament which would have sharply restricted public gatherings. Although the president is more powerful than ever, he gives the impression he still listens when there is a big outcry.

Article says that Russian President, Vladimir Putin, has identified bureaucrats as his new foe.

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