Dissident Turned Technocrat: Medvedev Takes On Putin with Governor Appointment

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Just like the Russian president in Moscow, the governor of Kirov Oblast has to deal with oligarchs who try to set the rules of political decision-making. His greatest victory so far has been against the most powerful of these men. It involved the opening of a branch of the German retail chain Metro in Kirov city.

During the tenure of Belykh's predecessor, Nikolai Shaklein, a member of Putin's party, Metro bought a site in the western part of Kirov city shortly after the area had been designated as construction land. It planned to build a store on the site. Metro was forced to buy the land from a private company run by the then deputy governor. Deals such as these at the interface between government and business have earned certain individuals in Russia millions.

But once the sale had been concluded, the authorities dragged their heels over the relevant permits. That's because Metro's plans annoyed another behind-the-scenes wheeler-dealer from Putin's party. That man was Oleg Berezin, the richest man in Kirov.

Berezin, 47, may be a simple member of the regional parliament, but he is so powerful that the mayor of Kirov city, which has a population of 450,000, pays frequent courtesy visits to the oligarch. And the mayor waits patiently in an anteroom to be granted an audience. Before the election, businessman Berezin handed out a brochure listing the candidates he approved. The duly elected representatives thanked him for it.

Decisive Changes

When, as part of Medvedev's anti-alcohol campaign, Governor Belykh attempted to pass an act that would have prevented the sale of spirits between 11 o'clock at night and 7 o'clock in the morning, the parliamentarians threw it out. Coincidentally or not, Berezin is the main shareholder of the largest vodka factory in the region.

Until Metro arrived on the scene, Berezin had a monopoly on the local food stores. Using his contacts to people close to the former governor, he succeeded in delaying the start of construction of the Metro store.

However, when Belykh entered office, things suddenly began moving quickly. The new Metro outlet opened its doors on Oct. 7 last year. Since then, another Russian chain of supermarkets has also opened a branch in the city, and it plans to open as many as 20 stores.

"We can't hope to make decisive changes unless Russia itself changes, and the state ensures fair competition and creates good conditions for investment," says Maria Gaidar, Belykh's deputy. "But the city is unlikely to become a Silicon Valley because our best minds are still leaving."

Needing Luck

When Medvedev visited Kirov last year, Gaidar and Belykh took him to an ultramodern blood plasma factory currently under construction. It is hoped this will supply the entire country with plasma within two years so that Russia is no longer dependent on expensive imports. Although no more than the superstructure has been completed, there are great aspirations for the factory.

They then visited an arts-and-crafts workshop, a rather unprofitable business which serves as something of a symbol of the parlous state of the economy at the present time. Even so, the president personally reached into the pot of clay and tried to fashion himself a mushroom. "Perhaps it's a lucky mushroom," a member of his delegation quipped.

Lucky or not, Medvedev will need all the help he can get if he is to push through his reforms and successfully defend his place in the Kremlin against his powerful prime minister.

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• Part 1: Medvedev Takes On Putin with Governor Appointment
• Part 2: 'Our Stores Are Like Museums'
• Part 3: Taking on the Oligarchs