RUSSIA WATCH No.1, June 2000 Graham T. Allison, Director Editors: Ben Dunlap, Henry E. Hale Strengthening Democratic Institutions Project Production Director: Melissa C. Carr John F. Kennedy School of Government Researcher: Emily Van Buskirk Harvard University Production Assistant: Emily Goodhue Harvard’s Strengthening Democratic Institutions (SDI) Project is pleased to present the first issue of Russia Watch, a bi-monthly publication providing concise, informative, objective analysis of Russian politics. This new publication continues the tradition of our Russian Election Watch, which provided analysis and commentary on Russian politics during Russia’s decisive season of elections, beginning with the Duma campaign in the fall and culminating in the presidential elections in March. This issue offers background on the key players in Russian President Vladimir Putin’s new government, a look at Putin’s agenda for action and an overview of events in April and May. Our second issue, which will appear in August, will continue tracking the new government’s policies, adding commentaries from a number of Russia’s own top political analysts. We hope that you find Russia Watch useful and we welcome corrections, feedback and especially suggestions about ways this report can be improved. – Graham T. Allison, Director, SDI Project TOP NEWS OF APRIL-MAY • Putin inaugurated May 7, calls strengthening the state top priority. SEE INSIDE: • • Putin names Kasyanov PM, taps committed free-marketeers Putin inaugurated, p. 2 • for key cabinet posts. Who is in Putin’s new • Government? Find out on Putin creates 7 new presidential representatives (viceroys) to pp. 2-5 rebalance power between federal government and 89 • Putin’s radical Federation “states.” reforms, pp. 5-6 and p. 12 • Unity declares itself a full-fledged political party at congress. • It’s party time for Unity, p. • 6 Russia ratifies START II, CTBT. • • Media crackdown, p. 7 and Russia takes tough line against ABM Treaty changes before p.9 Putin-Clinton summit. • Prospects for the summit, • Armed tax police raid main opposition media headquarters. p. 8 • Economy growing at 5% for first time since reforms began. • Putin government submits 13% flat tax plan • Kirienko leaves Duma to head new Volga Federal District, Nemtsov named leader of Union of Right Forces in parliament. APRIL AND MAY IN RUSSIA Since Vladimir Putin won election as Russian President on March 26, he has lived up to his reputation as a tough, BACK ISSUES OF RUSSIAN ELECTION WATCH CAN BE pragmatic man of action. Almost immediately, he confirmed a FOUND AT: strongly pro-market course in the economy, launched what www.ksg.harvard.edu/bcsia/sdi could prove to be a radical reform of the federal structure, and rammed the START II treaty through the parliament (Duma), which had refused to ratify the document for 7 years. But Putin’s early moves raise alarms among many Russians about democracy and human rights. While he continues to laud these values as one of Russia’s few accomplishments of the past decade, an armed raid on the main opposition media group and other actions indicate a willingness to compromise them for stability and prosperity. (For a briefing on threats to the Russian media, see p. 9) 1 PUTIN INAUGURATED effectively the number two man in the government as On May 7, former President Boris Yeltsin passed the deputy prime minister overseeing the whole bloc of official symbols of office to Vladimir Putin, economic ministries. Kudrin (right) is also Finance declaring that the torch had passed to a new Minister himself. Another such generation “dedicated to the values of democracy” critical appointment was and “less frozen by the German Gref as Economics habits of the past.” Minister. Also an open associate Yeltsin concluded with a of the Gaidar-Chubais team, Gref charge: “Take care of is head of Putin’s Center for Russia.” Putin, his hand Strategic Research, where Putin on a copy of Russia’s has charged him with developing a strategic plan for Constitution, then took the Russian economy. (For the list of Putin’s the oath of office and was appointments and brief biographies of the new and officially sworn in as President. He used his important figures, see pp. 3-5 below.) inaugural remarks at the lavish ceremony to promise that he would revive Russia and improve the lives of Almost immediately after Kasyanov got the nod from its people. Putin, he began to struggle with the Gaidar-Chubais team for control over the new government’s reform PUTIN TAPS NEW REFORMIST agenda. Kasyanov, for example, said that he had not read all of Gref’s economic plan and that the new GOVERNMENT, RESTRUCTURES government’s plan would be its own, different from MINISTRIES Gref’s plan. Gref then reasserted that his plan was in The day before his inauguration, Putin declared that fact the blueprint that the new government would use. his top priority would be to strengthen the state, By the end of May, it appeared that Putin had starting with the government and presidential orchestrated a compromise that would retain Gref’s administration. He began by officially nominating plan as a basic guide to future policy. Mikhail Kasyanov Prime Minister. On May 17, the Duma officially Kasyanov remains in a strong position vis-à-vis the confirmed the Gaidar-Chubais team, however, having managed to appointment of get his ally, Igor Shuvalov, appointed as Kasyanov, Government Chief of Staff. This post gives previously Putin’s Berezovsky’s allies in the government a major voice first deputy PM and in the government apparatus, which powerfully de facto Prime influences all ministries. Minister, with even the backing of some Putin also began downsizing the government, cutting Communists in a vote of 325-55. Kasyanov the number of ministries from 30 to 24 and the (pictured) is widely regarded as a supporter of market number of government agencies from 39 to 33. He reforms, although he comes from the team of media also eliminated the post of first deputy prime minister mogul and self-proclaimed “oligarch” Boris and reduced the number of deputy PMs from seven to Berezovsky rather than that of the early Yeltsin-era five. reformers Yegor Gaidar and Anatoly Chubais. New ministries: Putin then appointed the rest of his government. Ministry of Economic Development and Trade While almost all of the “power ministries” (Foreign Ministry of Industry, Science and Technology Affairs, Defense, FSB (ex-KGB), and others—see Ministries and agencies abolished: pp.3-4) kept their leaders, Putin named a series of Ministry for the CIS; Science Ministry; Trade radical pro-market (“liberal,” in current Russian Ministry; Economics Ministry; State Committee parlance) reformers from the Gaidar-Chubais team to for Northern Regions; Environmental Committee; Youth Policy Committee; Federal Service for Civil other key posts in government, in part as a Aviation; Federal Migration Service; Federal counterbalance to Kasyanov and Berezovsky. The Service for Currency and Export Control; Roads most important of these is Aleksei Kudrin, Agency; Cinematography Committee; Land Committee 2 PUTIN’S CABINET OF MINISTERS The “Top Five” Prime Minister: Mikhail Kasyanov, 42, born in as a counterweight to Kasyanov (as far as oligarchic Solntsevo, suburb of Moscow. influences go). Kudrin will oversee the Finance, Tax, Previous position: Finance Economic Development and Trade, and Anti- Minister. Speaks fluent English. Monopoly Ministries as well as the Federal Kasyanov has brokered several Bankruptcy Service. debt-restructuring agreements, such as the $10.6 billion write-off Chief of Government Staff: Igor Shuvalov, 33, from the London Club this past February. Thought by studied law at Moscow State University. Formerly analysts to be close to oligarchs Boris Berezovsky Chairman of State Property Fund (1998-2000). Close and Aleksandr Mamut (a banker with links to the to Aleksandr Mamut and Kasyanov, but part of the Kremlin “Family”). As Prime Minister, Kasyanov Chubais team until 1998. Holds considerable will oversee the State Customs Committee, the influence, as he is responsible for processing all Federal Securities Commission, and the Property government decrees, and for supervising the work of Relations Ministry. dozens of government departments. Finance Minister, Deputy Prime Minister: Aleksei Deputy Prime Minister: Viktor Khristenko, 42, Kudrin, 39, born in Latvia. Holds a degree in worked in the government in Cheliabinsk from 1990- Economics from Leningrad State 1997, mostly as Deputy Governor (1991-96). In July University. Known as a of 1997, Chubais brought Khristenko to Moscow to “radical-liberal” economist. work for the Finance Ministry. Appointed First Worked closely with Putin when Deputy Prime Minister in May 1999. the two served together as deputy mayors in St. Petersburg under Minister for Economic Development and Trade: Anatoly Sobchak. Kudrin is a self-proclaimed German Gref, 35, trained as a member of Anatoly Chubais’ team. He was first lawyer. Deputy State Property brought to Moscow in 1996 to work as Chubais’ Minister from 1998-2000. He is a deputy in the presidential staff and as supervisor of member of the Petersburg group of the Oversight Department (this became Putin’s job liberal reformers and served on the when Kudrin vacated it). In March 1997, Kudrin committee of privatization there. Heads Putin’s became Chubais’ First Deputy in the Finance economic think-tank, the Center for Strategic Ministry, a position he has held until this year. Seen Research. The “Power Ministers” Foreign Minister: Igor Ivanov, 45, Director of the Federal Security Service (FSB): Foreign Minister since 1998. A graduate Nikolai Patrushev, 48, born in Leningrad. Has been of the Moscow Institute of Foreign working in the security organs since 1974. Was Languages. Fluent in Spanish and English. Supervisor of the Oversight Department in 1998. Director of the FSB since August 1999 (Putin’s Defense Minister: Igor Sergeev, 62, born in successor in the post).