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. Last Updated: 07/27/2016

Kasyanov Promises a 'Different Country'

Prime Minister Mikhail Kasyanov urged the State Duma on Thursday to pass a raft of reform bills that he promised would turn Russia into a "different country" by next year.

Kasyanov said the bills will form the basis for long-awaited judicial, land, pension and labor reforms and a further streamlining of the tax system. They would also lay the path for structural reforms in the economy, he said.

"If the State Duma passes all these bills during its spring session, Russia will become a different country — more advanced, free-market and democratic," Kasyanov told reporters after a morning meeting with Duma leaders.

Duma Speaker Gennady Seleznyov said that parliament may be forced to work overtime into the summer months to get all the legislation through.

"Before the [May] holidays, we will reach an agreement with the [presidential] administration on the schedule by which bills already introduced to the Duma will be considered," Seleznyov said.

President Vladimir Putin touched on all of these issues during his state of the nation address earlier this month, and Kasyanov said that this latest administration initiative is a natural extension of that speech.

Kasyanov said a new set of bills will be sent to the Duma in a few days, but he declined to elaborate on them.

Political observers said that the bills on taxes, land ownership and pensions, among others, are sure to pass.

"The bills will definitely pass," said Vladimir Pribylovsky, head of the Panorama think tank. "The president has an obedient Duma. If he introduced a bill that would made hooliganism punishable by the death penalty, then they would pass that, too."

Earlier this month, Putin got an upper hand in the Duma when the pro-Kremlin Unity faction joined forces with the Fatherland-All Russia movement. The merger threw the balance of power away from the Communists, who had had the most votes in the Duma.

The bills will be divided into two chunks: One dedicated to economic and social policy; the other to judicial reform. The first package includes tax reform, changes to the Land Code, seven laws regarding pension reform and revisions to the Labor Code.

An important tax provision soon to be introduced will be a bill on production-sharing agreements, which will set a tax regime for foreign investors who want to participate in large-scale projects with a Russian partner.

Deputy Prime Minister Viktor Khristenko said the PSA bill would be approved by the ministries by June 20 and then sent to the Duma. He said the bill should go into effect by Jan. 1. If the legislation passes, it could jump-start Russia's oil industry by reassuring foreign investors that their profits will not be eaten up by taxes.

At a morning Cabinet meeting, Kasyanov announced that he has given the green light to the long-awaited Land Code — which would allow the first sales of land in 70 years — and has sent it to the Duma for ratification.

"I urge everyone to be attentive as the bill goes through," he said.

Even though the code would establish a framework to govern the sale of commercial land, it fails to address the controversial issue of farm land. A number of lawmakers and regional governors are fiercely against the sale of farmland, which they say needs to be protected from greedy buyers. Putin agreed earlier to make farmland sales part of a separate bill.

Nonetheless, the municipal and industrial land that could be sold under the submitted Land Code is worth about $1 trillion and liberalizing such land transactions could potentially lead to a flood of investment, according to the CentreInvest brokerage.

Sales of urban land would give both Russian and foreign enterprises — most of which depend of long-term land leases — a greater degree of security.

"If a company does not own the land where its plant stands, it creates additional risk for shareholders," said Vladimir Merkushov, an economist at CentreInvest, in remarks reported by Reuters.

Pribylovsky disagreed, calling the Land Code "pure propaganda." Governors have always had the right to decide how land sales are handled in their fiefdoms, and the bill doesn't do much to change that.

"It doesn't change the status quo," he said. "That can only be altered through reform of agricultural land, but that has been shoved off to another bill."

Putin says that passing both the Land Code and the separate bill legalizing the sale of farmland is one of his administration's top priorities.

Prosecutor General Vladimir Ustinov harshly lashed out at the proposed judicial reform in a speech before the Duma on Wednesday. The Prosecutor General's Office has long opposed the legislation that would greatly weaken its investigative and procedural powers.

Yevgeny Volk, head of the Heritage Foundation Moscow office, said the Kremlin's fresh burst of energy in pushing reforms through parliament is no reason for investors to get optimistic. The laws, he said, are in no way revolutionary and will probably not change Russia overnight — or even over the course of a year.

As always, the actual law won't matter as much as their implementation, which will be drawn up later, Volk said. Without a systemic restructuring of government or a cut back on the labyrinth of regulatory and licensing requirements, the actual laws will have little impact.

"There is some good and some bad," he said. "There is a lot of wishful thinking, and the real devil will be in the details."

Vladimir Pekhtin, lead of the Unity faction, said on RTR television that pension reform and the Labor Code will pose the biggest challenges in passage.

"Already in the Duma we are running into conflicts over these issues," Pekhtin said.