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New russia pm aims for reshuffle slimmer team

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New Russian PM Aims for Reshuffle, Slimmer Team
Fri Mar 5, 2004 07:46 AM ET

By Darya Korsunskaya
MOSCOW (Reuters) - Russia's new prime minister, Mikhail Fradkov, pledged on Friday to slim down and reshuffle the government and tackle a lumbering bureaucracy that is stifling the nation's economic potential.

His pledge to streamline bloated government structures responded to calls for more effective administration by President Vladimir Putin, who nominated him earlier this week and is cruising toward re-election on March 14.

Speaking to the State Duma or lower house, which confirmed him in the top government job, Fradkov said he would form a team more compact than that of outgoing prime minister Mikhail Kasyanov, which had 24 ministers and six deputy premiers.

Fradkov, plucked from obscurity by Putin, was even more emphatic in later remarks.

"Ministries will be few. They will get more power and responsibility. Bureaucracy -- I mean bad bureaucracy -- will be reduced to a minimum," he said.

Fradkov's remarks set off a frenzy of speculation as to who will stay or go in the new administration, with much attention focusing on the future of liberal Finance Minister Alexander Kudrin, seen by analysts as a champion of reform.

A radical slimming could mean the departure of key players from Kasyanov's team, whose members include deputy prime ministers Viktor Khristenko, Boris Alyoshin, and Economic Development Minister German Gref as well as Kudrin.

Russia's oil export-driven economy has boomed over the past year, fueled by high world prices for crude. But analysts say red tape and corruption hold back the growth of badly-needed small business.


In a first step, Fradkov said liberal economist Alexander hukov, seen as a reassuring figure by Western investors, would be his sole deputy.

"I have already said there will be only Zhukov," Fradkov said after being formally confirmed in his post by a big majority in the Putin-controlled Duma.

Fradkov named Zhukov as his deputy last Tuesday.

Putin, who is sure to win a second term in the Kremlin in an election on March 14, sacked Kasyanov's government on February 24 and promised to pick a new cabinet whose line-up would make clear his plans for the next four years.

Fradkov, 53, a former tax police chief, played his cards close to his chest when he addressed the Duma.

But one analyst saw his subsequent remarks to reporters as significant. "It means there will be one lieutenant and everyone will be equal under Fradkov and Zhukov," said Roland Nash, chief strategist at Renaissance Capital.

"(Finance Minister) Kudrin's position has by definition been diminished and it will be interesting to see if he stays."

Fradkov refused to be drawn by journalists on the question of a cabinet shake-up. "Consultations are going on. This information is quite delicate and I will put my proposals to the president in due course," he said.

Asked whether there could be developments this week, he said: "I can't talk of dates. All this depends on the quality of names put forward and the reaction of the president."

Analysts cautioned against hasty predictions of who might be in the new government.

"Putin has shown it is impossible to predict his decisions. Fradkov will make proposals but it does not mean Putin will accept them," said Evgeny Gavrilenkov, chief economist at Troika Dialog, a Russian investment bank.

Fradkov told the Duma his policies would mirror those outlined by Putin -- promoting economic growth, fighting widespread poverty and reforming the armed forces. He said his government would reduce further the tax burden on companies.

Fradkov was foreign trade minister in 1997, trade minister in 1999 and tax police chief in 2001-2003, but has never spelt out his own credo. He is widely seen as Putin's lieutenant rather than a political player in his own right like Kasyanov.

Fradkov's appointment indicates Putin intends to strengthen still further his already nearly absolute powers but gives few clues as to the president's future course.

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