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. Last Updated: 07/27/2016

Liberal Ministers Take the Blame

Liberal ministers Alexei Kudrin, German Gref and Mikhail Zurabov, the architects of the Kremlin's controversial benefits reform, have said they are ready to take the blame for the way it has been handled and for exposing President Vladimir Putin to criticism.

The attempt to take the heat off Putin came as he faced mounting anger over the loss of millions of pensioners' Soviet-era benefits and opinion polls showed his approval rating plummeting by 20 percentage points over the last year.

The three ministers are also coming under fire from other factions within the political leadership, who want them to take the fall for the government's failure to ensure that cash payments reach former benefit recipients.

Rodina party leader Dmitry Rogozin said Friday he was going on a hunger strike in an effort to secure the Cabinet's resignation. Earlier last week, Rogozin also called for the ouster of Finance Minister Kudrin, Health and Social Development Minister Zurabov and Economic Development and Trade Minister Gref over the affair. The three ministers are seen as the main opposition within the Kremlin to the hard-line siloviki faction of serving and former security service officers.

At Friday's session of the State Duma, Kudrin said that ministers would "accept full responsibility" for the way the reform had been introduced, while Zurabov acknowledged that the Cabinet had shown excessive "self-confidence" in regional authorities being ready to make the cash payments to millions of pensioners and other socially vulnerable groups.

"We, of course, partly exposed the president and the Duma in areas that require quick correction," Kudrin said. "We recognize this and accept full responsibility."

In a policy U-turn, Kudrin also said he might be prepared to dip into the government's stabilization fund, a reserve account created to insulate Russia from the inflationary effects of windfall oil revenues, to pay for an emergency spending package for pensioners. "I'm not denying the possibility of using this source, but we would need to do it in such a way that it does not hurt pensioners' pockets," he said.

Kudrin has previously resisted all attempts by government officials to use the fund for anything other than paying off foreign debts.

Zurabov conceded that ministers had not foreseen the problems in getting cash to pensioners. "In our self-confidence, and I confess this, we thought local governments would have analyzed the problems," he said.

Gref said Friday that Putin would decide whether the ministers would keep their jobs. "I'm ready to be the target, whether it is for this or the lack of toilet paper," Gref said, Reuters reported.

Chess champion Garry Kasparov, a leading liberal critic of Putin's government who heads Committee 2008: Free Choice, told Ekho Moskvy radio on Saturday that he expected one of the liberal ministers to be fired this week.

Political analysts have pointed to the benefit reform as a key factor denting Putin's popularity, citing recent opinion polls that have seen his approval ratings slide by 20 percentage points over the past year.

According to a poll published by the independent Levada Analytical Center this month, at the end of 2004 only 39 percent of Russians considered Putin a politician to trust, compared to 2003 when Putin's trust rating was 58 percent.

The pro-Kremlin Public Opinion Foundation also has gloomy figures. Its poll, conducted in mid-January and published last Thursday, shows Putin's electoral support falling by 22 percentage points over the last year.

In January 2004, 65 percent of respondents said they were ready to vote for Putin, compared to 43 percent this year. The poll, conducted among 600 respondents all over Russia, has a margin of error of 2.5 percent.

Analysts across the political spectrum said the pressure on the liberal ministers was another sign of growing panic within the siloviki over Putin's position, which now looks under genuine threat for the first time in years.

Independent political analyst Andrei Piontkovsky said that the siloviki are not only tired of a government that they consider too liberal, but of Putin as well. "If Putin's rating drops much more, they will likely decide to ditch him," he said.

The benefit reform has now alienated a group that had previously been one of Putin's biggest support bases, Piontkovsky said. "Putin disappointed the liberals and the intelligentsia when they understood that he was stepping back from democracy. The governors hate him after he pushed through a bill abolishing their direct election. After the arrest of Mikhail Khodorkovsky, the business elites now look on him as an enemy. And now the pensioners are disappointed," he said.

Kremlin-connected analyst Sergei Markov agreed that the difference with the benefits crisis, as opposed to earlier problems Putin's government has faced, is that this time protesters are calling not just for top ministers to resign, but also for the president to go. "This, in particular, is what is worrying the Kremlin most," Markov said.

Markov said that the polls have shocked Kremlin officials who thought that nothing could dent Putin's positive ratings. "They thought that Putin would lose a maximum of 2 percentage points on his ratings. Nobody was expecting him to lose 20 percentage points," he said.

But while siloviki-backed nationalist politicians have blamed the liberal ministers for the mess over benefits, their removal alone will not restore Putin's credibility in the eyes of elderly Russians, who have formed the core of his popular support until recently, analysts said.

And firing the liberal ministers would not necessarily help restore Putin's reputation, analysts said, as there are no obvious candidates to replace them.

"Putin finds himself in a quite curious situation: He is the victim of the system he created," said Yury Korgunyuk, an analyst with the Indem think tank. "He cannot even fire anyone, since everyone who is in power ... has been appointed by him and are his friends. Pensioners are well aware of that."

Putin could turn out to be the victim of his own power vertical, analysts said, as in a system where all power is concentrated in the Kremlin's hands, the president is accountable for everything and everyone, and where important laws are approved in a great hurry without any real public discussion. And with such a top-heavy system, pensioners naturally blame Putin for their problems.

Putin "is losing the aura of the strong leader people could rely on," said Masha Lipman, an analyst with the Carnegie Moscow Center. Over the past five years, people have gotten used to Putin and the government being synonymous with each other, and "offering up Zurabov's or someone else's head would not convince anyone" that Putin is properly in control, she said.

As for the Cabinet, ministers' unwillingness to back their own reform shows just how weak they are, Lipman said.

"If the law was well thought out, some of these protests could be avoided," she said. "What is happening, however, is that the government is afraid of upsetting people and it backtracks easily, almost immediately under what looks like very soft pressure from the people."

This kind of attitude, Lipman said, is also a consequence of the centralization of power, where decisions are taken behind closed doors and rubber-stamped by parliament. Under such a system, there is no way to improve legislation, since any criticism is regarded as disloyalty, she said.

The benefit reform was rushed through the Kremlin-controlled Duma in August in double-quick time, without any time allowed for discussion. Opposition and independent deputies complained that they were given less than 24 hours to scrutinize amendments before it came up for a second reading and that they were handed a new version of the bill minutes before the debate started.

The United Russia faction, which has over the past two weeks followed the Cabinet's line and blamed regional authorities for failing to fund pensioners' cash payments properly, said in a statement Friday that there was "not enough coordination among different branches of executive power."

The faction also accused Karelia and the Voronezh, Pskov, Saratov and Tula regions of failing to offer any cash payments in place of benefits.

Markov said that Putin had been considering a Cabinet shakeup, but has been hamstrung by a lack of good candidates. "The same team of ministers have prepared other reforms as well and they are in charge of them. You cannot replace them at the moment," he said.

Yevgeny Yasin, the head of the Institute for Higher Economics who served as an economics minister from 1994 to 1997, said that firing the liberal ministers would be "a big tragedy" for Russia, as they were the "most competent" of Putin's ministers.

But Markov said that, despite the problems in replacing Kudrin, Gref and Zurabov, the siloviki are very happy that the liberal ministers they don't like have created problems for Putin.

"The siloviki would like to use this chance to change the government, but this is unlikely to happen," Markov said.