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. Last Updated: 07/27/2016

Klebanov Demoted to St. Pete Envoy

APIlya Klebanov, the minister for industry, science and technology
President Vladimir Putin appointed Ilya Klebanov, the minister for industry, science and technology, to be his representative to the Northwest Federal District, the Kremlin announced Saturday.

Analysts said the move was a further demotion for Klebanov, a former deputy prime minister, whose plans to reform the defense industry ran into powerful opposition.

Klebanov, 52, will replace St. Petersburg Governor Valentina Matviyenko, who was Putin's envoy to the district before her election last month.

Klebanov, in charge of the defense industry since 1999, was stripped of his deputy prime minister post in February 2002. He continued to serve as minister of industry, science and technology, while Prime Minister Mikhail Kasyanov assumed direct responsibility for defense contracts.

The reforms Klebanov introduced in 2001, intended to consolidate the country's 1,700 defense enterprises into a smaller number of holdings, were widely criticized by industry players and analysts as ill-conceived. Klebanov's plans stalled, and he also was accused of taking sides in awarding defense contracts.

Throughout 2002, Kasyanov stepped in to overturn two key defense contract awards involving sales to China of 40 Su-30 fighter jets and two destroyers.

Since then, Klebanov appeared to gradually lose control over reform -- a process that accelerated after Deputy Prime Minister Boris Alyoshin took up oversight of the defense industry on his appointment in April 2003 and moved to review Klebanov's plans.

"The military-industrial complex will be happy," said Konstantin Makiyenko, the deputy head of the Center for Analysis of Strategies and Technologies, or CAST, in a reaction to Klebanov's appointment.

Ruslan Pukhov, the director of CAST, also welcomed the decision. "This is an elegant dismissal," he said. "Originally the institution of [presidential] envoys was created parallel to the governors inherited from the Family. ... Now that everyone is reined in, this post is merely a decorative one. You could even put a Cheburashka [toy mouse] there."

An engineer by profession, Klebanov headed the commission investigating the Kursk submarine disaster in August 2000, in which 118 sailors were killed.

Staff Writer Robin Munro contributed to this report from St. Petersburg.