THE LONG MARCH….

On the home front, President Vladimir Putin moved another step forward in his gradual but seemingly inexorable march through the key institutions of the Russian state. He replaced Central Bank chief Viktor Gerashchenko with Deputy Finance Minister Sergei Ignatyev. Some commentators noted that Gerashchenko, who had served both as head of the Soviet Union’s Gosbank and two terms as head of Russia’s Central Bank (he was dismissed just five months before his second term was up), had done little to begin rebuilding Russia commercial banking system, in ruins since the August 1998 ruble crash, and thus had long been rumored for the chopping block. Others said the changes at the Central Bank were more about power than policy, given that Gerashchenko had been fighting tooth-and-nail against legislation that would put the bank–which during his tenure and that of Sergei Dubinin had become a powerful and largely unaccountable fiefdom–under more strict governmental and parliamentary control. Indeed, while Ignatyev was more associated with “liberals” like Aleksei Kudrin, the deputy prime minister and finance minister and Gerashchenko was grouped with Soviet-era bureaucrats of a “centrist” political orientation (and once called by former Finance Minister Boris Federov the world’s worst central banker). Ignatyev quickly poured cold water on radical proposals, such as the one made by Andrei Illarionov, Putin’s economic adviser, that the ruble be devalued somewhat to increase the economy’s competitiveness. The new Central Bank chief suggested he would also go slow on reform of the banking sector. But if the ideological differences between the old and new chief bankers were somewhat hazy, what was clear that Ignatyev would generally heed his master’s voice. With Kremlin loyalists now in control of key fiefdoms like the Gazprom natural gas monopoly and the Railways Ministry, it could be said that, as one observer put it, the country’s main power institutions were falling under presidential control “one after the other.”