Johnson's Russia List
#5177
30 March 2001
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#7
Izvestia
March 30, 2001
YESTERDAY THE TYCOONS WERE DEFEATED IN RUSSIA
Government has been separated from business in Russia
Author: Semyon Novoprudsky
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
THE LATEST PERSONNEL CHANGES IN THE CABINET HAVE
A DEEP POLITICAL AND ECONOMIC SIGNIFICANCE. FROM
NOW ON, THERE WILL BE NO MORE OLIGARCHY IN RUSSIA,
SINCE MINISTRIES AND AGENCIES WILL BE HEADED BY
PURELY POLITICAL FIGURES. THIS WILL FLOW ON TO
THE SEVEN FEDERAL DISTRICTS AS WELL.

     For the past year, the nation has been guessing what its
president and government are like. On March 29, after the Cabinet
meeting that followed personnel changes in the security bloc of the
Cabinet, the situation was partly clarified. There will be no more
oligarchy in Russia. The Cabinet will cease to be politically ill-
matched, although political leaders will head all key ministries from
now on, rather than technocrats or ordinary state officials.
Government in Russia will be fundamentally different.
     The current political revolution may be explained by the
announcements of two senior Russian officials.
     On March 28, President Putin stated that there are "certain
groups of officials" in Russia who participate in decision-making.
This is the classic "political summit" of the state. It is
fundamentally important that this is not the presidential summit, but
the political summit.
     On March 29, Deputy Prime Minister and Finance Minister Alexei
Kudrin announced that personnel changes in the economic bloc "will be
done according to a different plan." Moreover, Kudrin confirmed that
the Finance Ministry is introducing strict accounting for defense
spending, for the first time in Russian history. This was an urgent
measure, since national defense is the largest expenditure item in the
2001 budget (over 200 billion rubles, i.e. every fourth ruble, is to
be spent on defense). Kudrin noted that Deputy Finance Minister Liubov
Kudelina has been appointed deputy defense minister, which is
connected with the fact that the Defense Ministry's accounts will be
handled by the Treasury from now on.
     The era of "capitalist ministers" has been ended in Russia. These
ministers focused on financial lobbying for projects related to the
profile of specific ministries. They are being replaced by political
ministers, such as new Defense Minister Sergei Ivanov and Interior
Minister Boris Gryzlov. The new ministers will not control the flow of
finances, or handle everyday matters: Liubov Kudelina and Deputy
Interior Minister Vladimir Vasilyev will do that. The ministers will
provide political cover for their ministries.
     That is why the plan for reforming the Cabinet envisages cutting
the number of ministries, while the remainder will get extra powers.
The number of deputy prime ministers will be reduced too. In this
connection, some exotic rumors are circulating - that Nikita Mikhalkov
may be appointed culture minister. In the new political formation,
Mikhalkov would play the same role as Sergei Ivanov: both of them will
be political, not "financial," ministers.
     The recent personnel changes in the security bloc of the Cabinet
do not imply "demilitarization," since it makes no difference what
military rank the new ministers hold or used to hold. This is
"decapitalization." Financial lobbying is being replaced by political
lobbying. This is the end of the world for the oligarchy which has
ruled the Russian political elite for the past decade. The old system
of running the country was based on the fact that people who had money
hired their own state officials. From now on, people with political
resources will turn them into financial resources. They will hire the
major capitalists, who will not be oligarchs, by definition.
     However, since only those at the top will have such political
opportunities, it is fair to say that the future Cabinet will be even
more "technical" than the present one.
     Now the institution of presidential envoys in federal districts
has acquired some meaning, though previously it didn't seem to fit in
with the rest of the reforms. A real hierarchy of government is taking
shape in Russia. Presidential envoys will form groups of
administrators in their federal districts, just as the president is
doing on the national scale.
     The new government system may prove to be good for Russia, if the
strong political system creates the legal basis for a liberal economy
and secures observance of law. Now historians can add a new line to
the textbooks: "In late March 2001, business was separated from
government in Russia."
(Translated by Kirill Frolov)

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