Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Kasyanov Is Putin's Choice For PM




President Vladimir Putin formally named Mikhail Kasyanov as his choice for prime minister Wednesday in a widely expected move seen as aimed at installing a technocratic government and preserving the status quo.


Kasyanov must be approved by the State Duma, and initial reaction from members of parliament indicated he could sail through on the first vote, scheduled for Wednesday.


"Most deputies aren't allergic to Kasyanov," said Communist Duma speaker Gennady Seleznyov, Interfax reported.


Kasyanov, 42, has been Putin's right-hand man in the government ever since he was elevated to acting president when President Boris Yeltsin unexpectedly resigned on New Year's Eve. Kasyanov was immediately promoted as Putin's only first deputy prime minister and retained his post as finance minister. He was appointed acting prime minister hours after Putin's inauguration Sunday.


Kasyanov said Wednesday he would make the formation of a new Cabinet and improving the economy his top priorities.


But even though Kasyanov has charmed investors with his credentials as a liberal and a technocrat, local and foreign media have widely reported he is linked with old-guard Kremlin powerbroker Boris Berezovsky.


Kasyanov told reporters that a slimmed-down Tax Code should be completed by the end of this month "to improve the investment climate and reduce the tax burden," Interfax quoted him as saying.


He also said there would be "no global changes" in the government he is due to appoint if he is approved by the Duma.


Kasyanov's bulky frame and flashy grin have become a well-known sight in Western financial circles, where as the government's chief Soviet-era debt negotiator since 1993 he has earned a reputation as a tough talker who defends Russia's interests to the hilt.


That position gave him access to information on lucrative financial flows in the debt market and a reported behind-the-scenes place in the sun with the nation's top tycoons.


But he only gained prominence in the local media with the August 1998 default when he was made pointman on debt talks with the West. And even though it was Kasyanov who then brought crisis-stung Western investors the news that Russia was not going to pay up on billions of dollars worth of frozen debt, his rise has been seen by foreign investors as a sign that the government is going to stay on track for market reform.


His career as debt negotiator climaxed earlier this year when he clinched a deal to write off 33 percent of the Soviet-era debt to the London Club of commercial creditors.


However, some political pundits say the nomination of Kasyanov means the new president is settling for a compromise with the Yeltsin old guard.


Boris Nemtsov, a former first deputy prime minister and co-leader of the Union of Right Forces, has connected Kasyanov and Berezovsky. "[Kasyanov] has ties to Berezovsky. But they're not deadly," he said on NTV's "Glas Naroda" talk show last month.


Kasyanov publicly denied any special links to Berezovsky in a news conference last month, but his mission to Ukraine in February where he lobbied in the tycoon's interests could put his statements under question.


On that trip, Kasyanov arrived armed with a list of Ukrainian companies crowned by the Nikolayev Alumina Plant - a key piece missing from Berezovsky's new metal's empire - that he would accept in exchange for billions of dollars owed by Ukrainian companies to Gazprom, United Energy Systems and several oil companies. Ukraine, however, declined the offer.


"Kasyanov suits all political circles. His appointment is aimed at preserving the status quo and is a sign that Putin is not going to make any radical moves," said Alexei Zabotkin, an analyst at United Financial Group.


But others said Kasyanov was likely to be relegated to the sidelines of policy-making, regardless of his supposed connections, because of plans to strengthen the role of the presidential administration and the Security Council headed by Putin's KGB ally Sergei Ivanov.


"It's most likely that Kasyanov will be mainly charged with following the orders of the president," said Oleg Vyugin, a former deputy finance minister who is in charge of mapping out the country's future macroeconomic policy for Putin's economic think tank, the Center for Strategic Research.


Vyugin, who also is vice president of Troika Dialog, said the tasks Putin was set to tackle first were noneconomic aimed at creating a level playing field for businesses, including implementation of laws and creating a strong "normally functioning" state.


"These are the key problems that will in turn solve economic problems and improve the investment climate," he said in a telephone interview Wednesday. "And these are the problems that fall within the president's brief and not the prime minister's.


"The role of the presidential administration is going to be high in decision-making, and the key issues mentioned by Putin fall under the jurisdiction of law enforcement agencies, the power ministries and the Justice Ministry - all of which are ruled directly by the president," he said.


Vyugin's comments come just days after Kommersant leaked details of a document it claimed was a presidential administration blueprint aimed at strengthening the powers of the Kremlin and uniting it with the Federal Security Service. Although the presidential press service has denied the authenticity of the document, observers say a more powerful presidential administration seems to be a given under Putin.


Vyugin said the key economic task Kasyanov would be charged with was getting a deficit-free budget for next year based on tax reform passed by parliament.


Analysts said Wednesday a Kasyanov prime ministership meant there would be no radical changes in the government's policies or in its makeup.


"Putin won't attempt to drive anything major through in the short term," Zabotkin said. "For this year it seems the only moves he's going to make on the economy will be pushing through the budget and changes in the Tax Code.


"Everything else like dealing with his relationship with the oligarchs and fighting corruption is likely to be postponed until a later date," he said. "For now Putin's main aim is going to be strengthening his own grip on power."


Vyugin said that even the proposed tax reforms could no longer be considered radical because they have been under discussion now for many years.


Even though most pundits predicted few changes in the makeup of a Kasyanov Cabinet, the jury was still out on whether the controversial head of the Fuel and Energy Ministry, Viktor Kalyuzhny, would keep his post.