Kremlin leader Dmitry Medvedev announced a radical reform of the Russian state. By early summer, all ministers will have to give up the positions they hold on the boards of state-owned enterprises in sectors that the government coordinates, to avoid a conflict of interest.
Currently, there are several ministers that hold positions in the boards of state-owned companies, including Finance Minister Aleksei Kudrin at VTB Bank, Deputy Prime Minister Igor Sechin at Rosneft and Energy Minister Sergei Shmatko, at Gazprom.
According to analyst Artion Koncin from UniCredit, the proposal has strong political implications. He said that the first person targeted by this measure is influential Deputy Prime Minister Igor Sechin, and Finance Minister Aleksei Kudrin, regarded as close to Prime Minister Vladimir Putin.
For the past several months, the media and Russian experts suggested that a possible rivalry is going on between Putin and Medvedev for the 2012 presidential election. Kremlin leader is kicking the head of the government with another proposal. Medvedev sought annulment of social tax increases introduced by Putin early this year and met with hostility by the business environment.
“The tax of 34% is unbearable for many businesses. I will ask the government to create mechanisms to reduce this tax since January 2012”, the chief of state said. The decision could jeopardize the long-term growth prospects of the Russian economy.