Publication: Fortnight in Review Volume: 6 Issue: 8

On April 8, the Central Election Commission made the obvious official, announcing that Vladimir Putin had won Russia’s March 26 presidential election. Moscow’s ever-active rumor mill then turned its sights on the issue of who would be in Putin’s new cabinet, which the president-elect was expected to unveil sometime after his inauguration, set for May 7. The odds-on favorite for prime minister, rumor had it, was Mikhail Kasyanov, the first deputy prime minister in the current cabinet.

Kasyanov’s front-runner status was due at least in part to the fact that he was a known quantity in the West, where he had spent time negotiating with Russia’s foreign creditors. On the other hand, he was rumored to be “close” to key Yeltsin-era insiders like Sibneft oil company head Roman Abramovich and Moscow banker Aleksandr Mamut. He was also reportedly known in some circles as “Misha 2-percent”–a reference to the commissions he allegedly received from deals which involved manipulating debt owed by and to Russia. True or not, Kasyanov felt it necessary to deny having any “concrete ties to any particular financial-industrial group.” He admitted that he occasionally met with people like Boris Berezovsky, Yukos oil company chief Mikhail Khodorkovsky and Alfa Group head Pyotr Aven.

Putin’s first economic appointment, however, seemed a wholly different breed. Andrei Illarionov, who was named a presidential adviser, had previously advised Yegor Gaidar’s and then Viktor Chernomyrdin’s cabinets before denouncing the latter and leaving government service in early 1994. In 1996, already head of the private Institute for Economic Analysis, he presciently warned that the “privatization” of the state by powerful groups and individuals was the single biggest obstacle to economic reform. That same year, he predicted that by the year 2000, Russia would resemble Peronist Argentina, complete with a highly monopolized economy and large financial-industrial groups living in symbiosis with the state apparatus. Ironically, Illarionov had agreed to advise Vladimir Putin, like Peron a career armed services officer who rode to power on a wave of nationalism and popular disgust with a corrupt ruling class. On the other hand, it was possible that the choice of Illarionov as an adviser was a signal that Putin was serious about cleaning up corruption and leveling the country’s skewed economic playing field. Time would tell.