Putin Has Russian Elite in a Frenzy Over Their Political Futures

(Bloomberg) -- The Kremlin elite is feverishly jostling for position in Vladimir Putin’s new term as the president surrounds himself with loyalists to pursue his war in Ukraine.

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Putin may carry out a significant government shake-up for the first time since 2020 after this week’s elections, according to people close to the presidential administration and the government. While the Kremlin hasn’t yet finalized a list of names and appointments, several potential changes are likely as the president looks to refresh his team at the start of another six years in power, the people said.

Nervousness about a government shuffle is rising among the political and business elite as Putin prepares to gain a fifth term in the March 15-17 election that’s tightly controlled by the Kremlin. With Russia’s invasion of Ukraine now in its third year, officials are working to ensure a landslide for Putin as the country’s war leader. Such a victory has taken on added importance after last year’s unprecedented mutiny by Wagner mercenaries shook his authority as president.

“For the Kremlin it is important to send a signal of rotation and fresh blood is needed,” said Mikhail Vinogradov, the head of the St. Petersburg Politics Foundation. Expectations of change “are being raised around all positions” in the government, though the level of speculation about who may be moved risks distracting top leadership from dealing with military issues, he said.

Energy Minister Nikolai Shulginov, 72, may step down, according to two people with knowledge of the matter. One of the people who may replace him is Boris Kovalchuk, who’s expected to resign as chief of the utility holding Inter RAO this week, people familiar with the matter said.

Kovalchuk’s father, Yuri, is a sanctioned financier described by the US Treasury in 2014 as a “personal banker” for Putin and other top Russian officials.

Agriculture Minister Dmitry Patrushev, 46, the son of Putin’s powerful security council secretary Nikolai Patrushev, may also be in line for a new position, three people said. With the growth of the agriculture industry one of Russia’s big successes of recent years, one possibility being mooted is that he’ll be rewarded with a promotion to deputy prime minister.

Yury Trutnev, who’s currently deputy prime minister in charge of development of Russia’s Far East, may also get a bigger role, one of the people said.

Kovalchuk, 46, may alternatively be considered for an appointment at one of the major state-held energy holdings or take over the job of Russia’s OPEC+ negotiator Alexander Novak, Kommersant newspaper reported, citing unidentified people familiar with the situation.

Kremlin spokesman Dmitry Peskov didn’t immediately respond to a request to comment.

While the government may feature some new names and responsibilities, there’s no sign Putin plans to alter the direction of policy in his confrontation with the US and Europe over Ukraine. In a flagship speech to lawmakers and top officials in Russia’s Federal Assembly on Feb. 29 that represented his election manifesto, the president set out long-term plans to 2030.

The West “not only seeks to impede our progress but also envisions a Russia that is a dependent, declining, and dying space,” Putin said. “It is our fighters that are creating today the absolutely essential conditions for the future of the country and its development.”

Putin last changed the government in 2020, ousting ex-president Dmitry Medvedev as prime minister and installing former tax authority head Mikhail Mishustin. He accompanied that with a far-reaching overhaul of Russia’s constitution to enable him to keep power as president potentially until 2036.

Mishustin, 60, is formally second to Putin in Russia’s constitutional order and would step in to replace him if anything happened to the 71-year-old president. The technocratic premier has been unfailingly loyal during the war, focusing on implementation of measures to blunt the impact of international sanctions and ramping up defense production without indicating any disquiet over the political and moral consequences of the invasion.

With Putin setting out plans to reform the taxation system in his manifesto, Mishustin is likely to carry on as prime minister, according to three people familiar. Still, there’s an outside chance he could be replaced by a figure such as Sergei Kiriyenko, the influential deputy head of the presidential administration and a vocal supporter of the war, according to one person with knowledge of the situation.

Kiriyenko, 61, was once a liberal reformer who became Russia’s youngest prime minister under President Boris Yeltsin in 1998, prompting critics to dub him “Kinder Surprise” after the children’s confectionery. He resigned after five months over the financial crisis triggered when the government defaulted on its debt.

Finance Minister Anton Siluanov, 60, another technocrat who’s helped to keep the sanctions-hit Russian economy afloat since Putin ordered the February 2022 invasion, may also continue in his post, they said.

Officials are waiting to learn what role Novak may play in the new government and whether Foreign Minister Sergei Lavrov, who’ll be 74 this month, will continue in the post he’s held for 20 years, people familiar said, asking not to be identified as the matter is sensitive.

The fate of Defense Minister Sergei Shoigu, 68, who’s been in his post since 2012, will also be closely watched. Putin stood by his close ally after Shoigu was targeted in the mutiny led by Wagner leader Yevgeny Prigozhin, who accused the defense minister of a litany of failures on the battlefield in Ukraine.

Still, even as he removes people from the government, Putin rarely lets them leave. In past shuffles, he has appointed redundant ministers to roles as presidential advisers.

Separately, speculation is resurfacing over the leadership of the Bank of Russia even as Governor Elvira Nabiullina’s current five-year term still has more than three years to run. Nabiullina, who’s held the post since 2013, tried to resign after the invasion began, but Putin insisted that she remain in her post. Her resignation is still seen as unlikely by people close to the Kremlin.

“There are a lot of rumors about her departure,” said Tatiana Stanovaya, founder of the R.Politik political consultancy and a senior fellow at the Carnegie Russia Eurasia Center. While Nabiullina helped ensure Russia’s economy survived the sanctions, Putin may want “someone who shares his vision,” Stanovaya said.

There’s only position not up for grabs - and that’s Putin’s.

Having given himself the prospect of 12 more years in power, there’s no sign the president is grooming any candidate as a potential successor.

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