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The Moscow Times, June 16, 2003

Kasyanov Defends His Cabinet's Record

Combined Reports

Prime Minister Mikhail Kasyanov last week defended his social and economic record before an agitated State Duma ahead of a no-confidence vote in his government Wednesday.

Yabloko and Communist deputies have banded together in a long-shot bid to topple Kasyanov's government for faults ranging from an alleged failure to rein in white-collar crime to an indecisive social policy.

But Kasyanov -- who appears to have won President Vladimir Putin's trust and has served as prime minister for more than three years -- looked confident as he stared down the Duma challenge.

"The lawmakers are trying to stir up politics," Kasyanov told reporters Wednesday after his first speech before the Duma in months.

The Duma faces re-election on Dec. 7, and Putin has hinted the new parliamentary majority may decide the face of the new Cabinet.

And while Kasyanov listed his government's achievements -- including keeping once-spiraling inflation in check -- he also threw a bone to the opposition ahead of the no-confidence vote, conceding the government had made some mistakes.

"There are things for which the government can be blamed despite its achievements," he said. But he cautioned that the no-confidence motion "should be treated with attention, patience and tolerance."

Kasyanov also tried to brush aside rumors that economic and other policy rifts have opened up between him and Economic Development and Trade Minister German Gref, who has fought publicly with the prime minister in recent months.

"Everyone in the government is committed to the same goals," Kasyanov said. "The only matter of debate now is how we achieve them.

"Our main task is to raise living standards by implementing economic growth at a faster pace than our neighboring countries," he said.

Putin also struck an optimistic note Wednesday and said Russia was sailing through the peak year of its debt payments. The foreign debt due this year totals $17 billion.

"In recent years, many people said that 2003 would be not only the year of debt repayment, but a crisis year. And they asked, 'How will we live through this year?"' Putin told census-takers in a Kremlin meeting, Interfax reported. "We are living through it, and everyone, at least the experts, sees that the country has solved this problem."

Kasyanov said timely repayment of debts and other signs of economic health have brought growing foreign investment to Russia.

"In the first quarter of last year, capital flight was $1 billion a month," Kasyanov said in televised remarks. "This year, we have a net inflow of capital."

He said foreign investment in Russia amounted to $6.3 billion in the first quarter, Itar-Tass reported.

Kasyanov's Duma briefing came one day after the lower chamber agreed to schedule a vote of no-confidence in the Cabinet for Wednesday.

The motion was submitted by the small liberal opposition Yabloko faction along with the struggling Communist Party, two groups that together with their allies can only expect to collect some 150 votes in the 450-seat chamber.

The tally falls far short of the 226 votes necessary for an official censure, and Western investors said they were confident Kasyanov would stay.

They said Kasyanov's government could fall only if Putin himself resolved to get rid of a leftover from the Boris Yeltsin era, when Kasyanov was deputy prime minister in charge of finance.

"We think that the no-confidence motion would fail without the support of the pro-Kremlin factions," the Aton investment house said in a research note.

"For Yabloko and the Communists the move is a smart piece of politicking as it allows them to draw attention to the government's flaws and to force other Duma factions to vote to retain an unpopular government," the note said.

Should the motion pass in two successive votes, Putin would either have to fire Kasyanov or keep his prime minister and disband parliament, calling new legislative elections.

Kasyanov has served as Putin's prime minister throughout the president's first term, and political analysts predict that Putin will not part ways with Kasyanov before the Duma elections.

Boris Nemtsov, the leader of the Union of Right Forces party, proposed on Wednesday that "the president should also take the position of prime minister" and "the government should be chaired by a person with an approval rating of more than 70 percent of Russia's population," Prime-Tass reported.

Kasyanov disagreed, saying that "to change something in the Constitution, especially things of such primary importance, today is just harmful and dangerous."

n The industrial sector grew 6.7 percent in the first five months of 2003 compared to the same period the year before, Russian news agencies quoted Kasyanov as saying.

In May 2003 the industrial sector grew by 8.5 percent compared to the same month a year before, he said.

According to figures from the Economic Development and Trade Ministry, the economy grew by 3 percent in the first five months of 2002 compared to the same period the year before.

Kasyanov was also quoted as saying that industrial output growth hit 8.5 percent in the first five months of 2003, compared to the same period of 2002.

"The first months of the current year were characterized by a quite high rate of growth in industrial production and investment," Interfax quoted him as saying.

Many analysts say the economic growth is mostly a result of high oil prices.

But Kasyanov said a drop in oil prices "will not be able to shake the strength margin of the Russian economy," according to Itar-Tass.

(AFP, AP, Reuters, MT)


See also:

the original at

No-Conifedence Vote

The Moscow Times, June 16, 2003

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