Asia Times: New prime minister faces immense challenges


	May 19, 2000	atimes.com

Central Asia/Russia

New prime minister faces immense challenges
By Sergei Blagov

MOSCOW - He does not have a plan yet, but Russia's newest Prime Minister Mikhail Kasyanov says he knows what he has to do to ensure a prosperous future for the country.

Overwhelmingly approved Wednesday by the 450-seat Duma (parliament), 42-year-old Kasyanov has promised that he will go easy on the economic surprises, he will support the military, reform the state apparatus and combat graft. And, he added, there will be an economic reform plan by early June.

Economists say that Russia urgently needs to speed up its economic growth rate in order to tackle the country's countless woes. They concede, however, that economic upturn may take a while. Russia's economic miracle may come only by the end of this decade, says Yevgeny Yasin, head of the Moscow-based School of Economics and a former Economy Minister, suggesting that Russia may achieve between 8 and 10 percent annual GDP growth rates by 2008-2010.

And Kasyanov just might be the man to contribute significantly to that growth, if, as some observers like Duma deputy and former deputy prime minister Alexander Shokhin believe, his Cabinet is likely to remain in office for longer than its predecessors. In the last three years, Russia has had five Cabinets.

Kasyanov has made a good start. He won 325 votes in the Duma to be approved as prime minister, more than the 233 votes his boss, President Vladimir Putin, got when he was appointed prime minister last fall.

Kasyanov is perceived as a pro-Western technocrat - mainly because he served as Russia's chief foreign debt negotiator in his previous capacity as deputy finance minister. Last February Russia clinched a deal with its creditors to reschedule $32 billion of Soviet-era debt to the London Club of commercial creditors, including having more than one-third of its debt written off.

The success of the negotiations is attributed to Kasyanov's efforts.

But the new prime minister may falter if allegations of graft are pushed further. Kasyanov is rumored to have close ties to controversial tycoon Boris Berezovsky. And, in certain sections of the media, he has been dubbed ''Misha 2 percent'' due to allegations that he provided unnamed banks with insider information on the debt market in exchange for 2 percent in kickbacks. On Wednesday Kasyanov shrugged off the rumors, denied any connection with lobbyists and asserted that he was ready to face more concrete allegations if any more were presented.

But in the meantime, the prime minister is concentrating on his Cabinet, to be announced after he is confirmed in his position. The rumor mill has already filled the key Cabinet posts of deputy prime ministers. Communications Minister Leonid Reiman is being tipped to become first deputy prime minister while economists Alexei Kudrin, first deputy Finance Minister, and German Gref are said to be the frontrunners for the post of deputy prime minister. Like Putin, both Kudrin and Gref are former deputy mayors of St Petersburg, and Reiman is also an ex-city official.

Gref heads the Center for Strategic Research, which has drawn up a comprehensive reform plan for Putin. Gref announced on Tuesday that his blueprint was to become the government's official reform program, but during his approval hearing Kasyanov was not so sure. He said it remains to be seen if Gref's program could be used by the government.

The Duma's quick and painless approval of Kasyanov augurs well for Putin and signifies that the parliament is far friendlier to the Kremlin than the previous chamber was to former President Boris Yeltsin. On Wednesday, the upper house, the Federation Council, unanimously approved Vladimir Ustinov, as Putin's prosecutor general, ending 15-months of conflict with the Kremlin over who should fill this post.

On Saturday, Putin, capitalizing on this support, announced a decree to boost central control of Russia by appointing seven top Kremlin representatives to oversee the regions. The president argued that strong central control is essential to ensure better government and boost efforts to raise living standards. He launched this campaign in early May by ordering some regions to rescind legislation that contradicted federal laws.

Some of Russia's 89 provinces have been testing the limits of their autonomy since the 1991 Soviet collapse. Each province has its own Kremlin representative with poorly defined powers. But Putin's new system appears aimed at ensuring more effective Kremlin control. The seven regions, which largely conform to the country's military districts, will be headquartered in the cities of Moscow, St Petersburg, Rostov-on-Don, Nizhny Novgorod, Yekaterinburg, Novosibirsk and Khabarovsk. Governors - even those who currently enjoy wide-ranging powers - welcomed the creation of districts for federal control. ''This is a necessity,'' Moscow Mayor Yury Luzhkov was quoted as saying.

But not everyone is welcoming the Kremlin's latest moves. It presages a politically ''cold summer'' says Nikolai Baratynsky, head of the Moscow-based Institute of Politics, of the attempt at more control over the regions and of government moves against the Media-MOST news organization.

Some Russian politicians and news organisations have expressed concern that the May 11 raid on the Media-MOST offices by masked gun-toting police officers could be a prelude to cracking down on free speech.

The raid was not unexpected, Media-MOST's counsellor Andrei Loschilin said to IPS, given its uneasy relations with the Kremlin. MOST said the raid was intended to punish the group's NTV television and other media outlets for critical coverage of Putin. But Putin's press service issued a statement saying that ''the president is firmly convinced that freedom of speech and freedom of the mass media are immutable values.''

Former Soviet president Mikhail Gorbachev has voiced cautious support for Putin and his team, but he has warned against authoritarian methods and condemned the MOST raid. And on Tuesday, 81-year-old Nobel laureate Alexander Solzhenitsyn lashed out at Putin for his reluctance to distance himself from endemic graft by taking concrete actions against it.

But despite these voices, the Kremlin seems to enjoy overwhelming support - or obedience - from the country's political elite. It remains to be seen whether Russian leadership can manage to translate this support into successful economic and social action.

(Inter Press Service)