Russia and the CIS News Digest
Putin and Fradkov Unveil Streamlined Government
Efficiency and consolidation, rather than the announcement of policy changes, were on the agenda as Russian President Vladimir Putin and newly confirmed Prime Minister Mikhail Fradkov introduced the reorganized Russian Cabinet of Ministers on March 9, only five days before Putin stands for reelection. The Russian government will consist of just 17 ministers, including Fradkov and one Deputy Prime Minister, economist Alexander Zhukov, who was a deputy speaker of the State Duma. The old cabinet had 30 ministers.
Some of the best known figures in charge of Russian economic policy in recent years are staying on, some with expanded authority. They include German Gref at the Ministry of Economic Development and Trade (MERT), Alexei Kudrin as Minister of Finance, and former Deputy Premier Victor Khristenko, who will now head the Ministry of Industry and Energy (MIE). Also keeping their jobs are Minister of Defense Sergei Ivanov, Minister of Internal Affairs Rashid Nurgaliyev, Justice Minister Yuri Chaika, and Emergencies Minister Sergei Shoigu.
Ex-Foreign Minister Igor Ivanov is widely described as "retiring" from that position, although now he will head the Security Council. Fradkov made a point of saying that the new Foreign Minister, Sergei LavrovRussia's Ambassador to the United Nations for the past 10 yearswas selected in consultation with Ivanov.
Close Putin aide and legal expert Dmitri Kozak, whom Putin identified as a main author of the reorganization, moves from the Presidential Administration to the post of Chief of Government Apparatus, with ministerial rank. The Government Apparatus, Putin said, "should turn from a parallel, shadow government, into an effective and modern administrative instrument." In their televised remarks, Putin and Fradkov both stressed that increased "personal responsibility" and accountability of the ministers are a central part of the design.
The health and labor ministries are consolidated into a Ministry of Health and Social Development under Mikhail Zurabov, until now head of the Pension Fund. Three ministries dealing with infrastructureTransport, Rail, and Communicationsare merged into a single Ministry of Transport and Communications, with new leadership: Igor Levitin, who in recent years has worked for the giant steel company, Severstal, and earlier was military commandant on the Baikal-Amur Mainline rail project. Alexander Sokolov, Rector of the Moscow Conservatory, will head a new Ministry of Culture and Information, subsuming the former press and culture ministries. Former Minister of Science and Technology Andrei Fursenko becomes Minister of Education and Science, eliminating the separate education ministry. There is a single, combined Ministry of Agriculture and Fisheries.
The former ministries for energy and atomic energy will now be part of Khristenko's MIEthe main agency for the "real economy," as Fradkov said, including much of the defense industry. The MERT, under Gref, will take over the former tax collection and state property ministries. Also eliminated is the Ministry of Antimonopoly Policy, whose functions the Prime Minister will oversee directly.
The Governor of Perm Oblast, Yuri Trutnev, has been brought in as Minister of Natural Resources.
Threats Against Glazyev, Khakamada Attributed to Berezovsky
Russia's Presidential elections will take place March 14, and President Putin went on the air March 11 to urge citizens to turn out and vote, but Russian media also highlighted a nasty side of the campaign: threats to the lives of candidates Sergei Glazyev and Irina Khakamada. The story originated with the Italian newspaper La Stampa, which interviewed Vladimir Solovyov, an ex-journalist with NTV, who had visited financier Boris Berezovsky in his place of exileLondonlast December. According to Solovyov, Berezovsky, who is fanatically committed to overthrowing the Putin regime, told him, "We need a victim. This must be a well-known person, whose death would shock public opinion. He should become an icon for the opponents of the regime."
According to account of the La Stampa interview carried on RTR Russian state television, Solovyov said he was sure Berezovsky meant a Presidential candidate, and that the disappearance of Ivan Rybkin (who subsequently dropped out of the race) really was a kidnapping, scripted to end in his murder. Said Solovyov, "I decided to disclose the details of this conversation for only one reason. Today, the lives of two other Presidential candidates, Irina Khakamada and Sergei Glazyev, may be in danger."
The warning, or threat, from Solovyov was picked up and broadcast by RTR, and featured in sensationalist fashion on Strana.ru and other Russian web sites.
Neocons Attack Putin as New Stalin
The Foundation for the Defense of Democracies, a neo-con haven, has published ads and op-eds calling Russian President Vladimir Putin a new Stalin, and defending jailed oil man Mikhail Khodorkovsky. The full-page ad in the March 11 Washington Post has a picture of armed soldiers in ski masks, as "the new face of Russia." Quoting Sen. John McCain (R-Ariz), it accused Putin of a "creeping coup against the forces of democracy," starting with the "arbitrary arrest" of Khodorkovsky, who was "leading the way toward transparency and openness before being jailed."
The Foundation includes Newt Gingrich, James Woolsey, Bill Kristol, and Richard Perle. On the day the ad appeared, the Foundation's President, Clifford D. May, had a column in the Scripps Howard News Service, also referencing McCain: "'A Creeping Coup'Is Russia heading back to the USSR?" He notes that McCain and Sen. Joe Lieberman (D-Conn) have a bill calling on Bush to throw Russia out of the G-8, until Russia "demonstrates its commitment to the democratic principles that unite all other members of the G-8."
Russia Seeks Increased Steel Export Quota to EU
Some particulars of the trade quota increases sought by Russia as the European Union gains 10 new members, are highlighted by John Helmer in a March 9 The Russia Journal article titled "Fradkov's First Test, The EU's First Cut." A Russian steel industry source told Helmer, "Currently, in the working negotiations the quota [proposed by the EU] for Russia equals 1,266,000 metric tons." This would be the ceiling on Russian steel exports to EU members. "We insist on expanding this quota by 450,000 to 500,000 tons," the source said, "This amount is approximately equal to the Russian export volume to the 10 countries joining the EU in May."
At a recent steel industry conference in Rome, Helmer reports, EU steel official Roelof Plijter said that the only additional Russian steel volumes to be allowed in 2004 would be those for Russian steel companies Severstal and Mechel to supply the plants they own in incoming EU members Latvia and Lithuania. Thus, "If the EU allows only for the Severstal and Mechel volumes totaling 161,000 tons, then the proposed new EU quota will fall about 300,000 tons short of the Russian position. For Fradkov to agree would oblige the government to accept a cut of 65% on last year's Russian exports to the ten new accession countries. Industry analysts who have examined projected growth of production and consumption of steel products in the expanded 25-member European Union suggest that this gap will be filled by producers from western Europe. In short, the Russian steelmakers believe they are being further shut out of the European market by lobbying from non-competitive European rivals."
Kazakstan Plans New Eurasian Railroad
A new rail line will connect China to Europe, Vice President of the Kazakstan National Railway Company Kanat Zhangaskin announced in Hong Kong March 11. Construction of the project will begin this year, and should be completed in four years, at a cost of $3.5 billion. Zhangaskin is seeking international investors to support the project. The new rail line, will run 3,083 kilometers inside Kazakstan, Zhangaskin said, and will cut transport time by comparison with existing routes.
The new railway will use international standards, and will connect all the existing rail lines. "After completion of the railway, a container from Hong Kong and other places in China can be directly transported to Europe," Zhangaskin said. He estimated that the annual transportation capacity of the railway will reach 40 million tons, and transit cargo flows between China, Iran, and Turkey, could be worth $2 billion a year, and for all Asian and European countries, the cargo flow will reach $7 billion a year.
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