On January 15, President Putin held his annual address to the Federal Assembly and announced plans to introduce constitutional amendments, making changes in Russia's power distribution system.

Soon after the presidential address, PM Dmitry Medvedev announced the resignation of the Government at a meeting with President Putin.

Later, Putin submitted to the State Duma the candidacy of Mikhail Mishustin, the head of the Federal Tax Service, for the position of Prime Minister. The State Duma voted on Mishustin's nomination the next morning and the presidential decree on his appointment was signed later the same day.

Other members of the Cabinet (Deputy PMs and federal ministers) will likely be appointed in
1-2 weeks (although the candidates to positions of Deputy PMs could be announced in 1-2 days).

The candidates for ministerial posts will be discussed and approved in the process of informal consultations between the President, the Presidential Administration and the new Prime Minister, as PM Mishustin does not have his own team and will exercise only limited influence on the process of forming the Government.

Simultaneously, Putin appointed former PM Medvedev to the newly-established position of Deputy Chairman of the Security Council (the Council is chaired by the President), thus making him effectively the No. 2 person responsible for national security, defense, foreign affairs and strategic planning, after Putin himself (more details on Medvedev's expected role in the new system in the attached memo).

The announced constitutional reform and the Government's resignation mark the start of the power transition process in Russia, which should be completed by the end of Putin's term of office in 2024 and create a new system of power distribution.

Ultimately, these changes should ensure Putin maintains control over key leverages of decision-making, particularly in managing key staff appointments, national security, defense, foreign policy and other key areas, in the period beyond 2024, while re-distributing authority between other power centers.

As for the status of the new Cabinet to be chaired by Mikhail Mishustin, two basic scenarios are possible:

1. Mishustin will chair an interim Cabinet to work until the next occasion for a change of Government, such as the State Duma election in 2021 or the implementation of constitutional changes. Once the new convocation of the State Duma is elected and/or constitutional changes are enforced, the Cabinet could resign and a new one be appointed under a new procedure presumed by the upcoming constitutional amendments.
2. The Cabinet will work until the Presidential elections in 2024, and a new procedure of forming a Government with stronger involvement by the State Duma will only be activated in 2024. In this scenario, the Cabinet will take full responsibility for implementing "national projects" and other high-level economic/social policy initiatives, and the status of Mishustin as Prime Minister will be higher.

The second scenario better fits with the practice of avoiding unnecessary staff reshuffles at the top governmental level, which was in place from Putin's return to the President's office in 2012, although it is too early to assess the probability of their implementation.

For more details on the next steps in the process if approval the new Cabinet and announced constitutional changes please write us to info@kesarev.com and request a copy of a Kesarev analytical update.

For more details on the new Cabinet structure please follow this link.