Publication: Monitor Volume: 8 Issue: 39

Russian Prime Minister Mikhail Kasyanov yesterday signed a document redistributing the cabinet’s responsibilities and powers. The Interfax news agency, quoting the government’s information department, reported that Kasyanov himself would now oversee the activities of the Nuclear Power Ministry, the Property Ministry, the Ministry for Industry, Science and Technology, the State Customs Committee and the Russian Federal Property Fund. He will also head the government’s commission on military-technical issues and “interact” with Russia’s Central Bank and Academy of Sciences. In addition to these functions, Interfax reported that Kasyanov will now “coordinate” the work of ministries and agencies subordinated directly to the president, including the Interior, Emergency Situations, Defense and Justice ministries and the Foreign Intelligence Service, Federal Security Service, the Tax Police, the Border Guards Service, the Federal Agency for Government Communications and Information and the Kremlin property department.

The announcement means that Kasyanov has personally taken over a number of the responsibilities previously assigned to Ilya Klebanov. Earlier this month, President Vladimir Putin, acting on Kasyanov’s recommendation, signed a decree stripping Klebanov of his deputy prime minister rank. Until his demotion, Klebanov, who carried out oversight of the military-industrial complex, also had responsibility for overseeing the Nuclear Power, Railways and Communication ministries. In redistributing the cabinet’s powers and responsibilities, Kasyanov put himself in charge of overseeing the Nuclear Power Ministry while putting Deputy Prime Minister Viktor Khristenko in charge of the Railways, Communications Energy, Natural Resources and Transportation ministries. Deputy Prime Minister Aleksei Kudrin, who doubles as finance minister, will oversee the Finance Ministry, the Economic Development and Trade Ministry, the Tax Ministry, the Antimonopoly Ministry, the State Statistics Committee, the Federal Securities Market Commission and the Federal Bankruptcy Service. The third deputy prime minister, Aleksei Gordeyev, who doubles as agriculture minister, will oversee that ministry, along with the State Fisheries Committee and several other less significant agencies. The cabinet’s fourth deputy prime minister, Valentina Matvienko, will oversee the Labor, Health, Education, Culture and Press ministries, along with the State Committee on Sports and the Pension Fund (Polit.ru, February 24; Moscow Times, February 19).

Some observers believe the diminution of Klebanov’s bureaucratic responsibilities earlier this month was just a first step and that he will sooner or later be removed from the cabinet altogether. Whatever the case, the new division of cabinet responsibilities would seem to be another bit of counter-evidence to long-standing rumors that Kasyanov’s position had been weakened from attacks by political rivals in the “Chekist” camp, the Kremlin faction made up of KGB veterans and/or natives of Putin’s hometown of St. Petersburg, including Klebanov. That faction is said to be in an ongoing power struggle with the “Family,” the faction of Yeltsin-era holdovers to which Kasyanov belongs. Almost immediately after Kasyanov was confirmed as prime minister in May 2000, rumors began appearing that he was on his way out. Among those named at various times as possible candidates to replace Kasyanov as head of the cabinet were Sergei Ivanov, who is now defense minister, former Prime Minister Sergei Kirienko and Novgorod Governor Mikhail Prusak (see the Monitor, August 1, 2001; February 28, 2001; August 11, 2000).

Kasyanov came under attack from different quarters last week, after comments he made during a meeting with top Finance Ministry officials that the government should work on creating a “liquid domestic debt market” by shifting away from borrowing in Western capital markets toward domestic borrowing. The goal of this, Kasyanov said, was to “transform the earlier ineffective borrowing” into “effective” borrowing. Andrei Illarionov, Putin’s economic adviser, charged that Kasyanov’s proposal was “based on false assumptions, on false logic, and carrying it out would have negative consequences for the economy.” Some analysts say that in order to attract buyers for Russia’s domestic debt, that government would have to establish high yields for bonds that would crowd out investment in the real economy, as happened prior to the August 1998 financial collapse.

Early last year, Illarionov publicly criticized Kasyanov for the government’s plan to reform the electricity sector and for getting into a public row with the Paris Club of sovereign creditors over debt payments by Russia that were coming due. Illarionov declared at the time that debt repayment was “a sign of a civilized state” and that failure to pay resembled “petty hooliganism, like ripping away cords in telephone booths, breaking windows or relieving oneself in a doorway.” Illarionov reportedly had to apologize to Kasyanov personally for those remarks (Kommersant, Moscow Times, February 22: see the Monitor, January 26, February 5, 23, 28, 2001).