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. Last Updated: 07/27/2016

Speculation Swirls as Zhdanov Leaves

The resignation of Yury Zhdanov, a senior official in the Economic Development and Trade Ministry, has set off a flurry of speculation in the media surrounding the circumstances of his departure.

Officially, Zhdanov, who headed the ministry's fledgling special economic zones program, left his post to take another job, according to a statement on the government's web site.

Zhdanov's interim replacement is Olga Markova, his former deputy in charge of creating tourist zones, said Irina Volina, a spokeswoman for the Federal Agency for Special Economic Zones.

On Wednesday, a source in the Prosecutor General's Office told Interfax that Zhdanov's departure was linked to the high-profile Tri Kita smuggling case, but provided little in the way of substantiating evidence.

Vedomosti offered a competing theory in its Wednesday edition, citing an unidentified former government official as saying Federal Security Service officials in the Kremlin associated with presidential aide Viktor Ivanov wanted to install their own people in powerful positions in the special economic zones agency.

The newspaper speculated that Zhdanov's ouster was an attempt to undermine Economic Development and Trade Minister German Gref's position within the government.

Gref took steps to dispel this theory Wednesday, however. He denied rumors that the special economic zones agency could be removed from the ministry and converted into a separate agency, as occurred previously with the Federal Customs Service.

"Zhdanov has been planning to make this move for a long time," he said, Interfax reported. "I am grateful for all the work he has done."

Kommersant reported Wednesday that Gref only learned about Zhdanov's resignation after the fact.

Gref's spokeswoman, Alla Borisenkova, said that neither she nor Gref's deputy, Andrei Sharonov, had any information about Zhdanov's departure. "Sharonov was in a state of shock for 20 minutes" after hearing the news, Borisenkova said.

Asked to comment on the purported link between Zhdanov's resignation and the Tri Kita case, Borisenkova said: "I have no idea where that came from."

From 1995 to 1998, Zhdanov worked in the Interior Ministry, becoming its youngest lieutenant general, Volina said. He later served as a deputy economics minister and a deputy customs chief.

Tatyana Chernyshyova, a spokeswoman for the Prosecutor General's Office, said Wednesday on Channel One television that 19 senior officials had been fired in connection with the Tri Kita case.

The state-owned television station mentioned Zhdanov's name in its report, but did not specifically identify him as one of the 19 officials.

Maxim Filatenkov, the duty officer at the Prosecutor General's Office, declined to comment Wednesday on the purported connection between Zhdanov and Tri Kita.

The owners of Tri Kita and Grand, the country's largest furniture retailers, were arrested on charges of failing to pay import duties. They are suspected of smuggling at least 400 tons of furniture and other goods worth some $2.3 million into the country in 2000.

Zhdanov was appointed to head the government's special economic zones program in July 2005. On Sept. 1, the government earmarked 8 billion rubles ($298.6 million) for the creation of tourist and industrial zones, which are intended to attract private investment using a range of tax incentives, Volina said.

"As soon as there is talk of government support for specific projects, the issue of corruption arises," said Yulia Tseplyaeva, head of research at ING Bank. "It's not for nothing that Putin keeps saying he hasn't succeeded in rooting out corruption."

Valery Draganov, head of the State Duma's Economy, Entrepreneurship and Tourism Committee, said Zhdanov's departure would not alter the development of special economic zones.

Alexei Shaskolsky, a department head at the Institute for Enterprise Issues in St. Petersburg, and who worked with Zhdanov on several occasions this year, conceded that economic zones in Russia were a far cry from those in countries like India, but praised Zhdanov's professionalism and "rhinoceros-like drive."