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Gets Soviet in Pension Fund Spat
By Victoria Lavrentieva
Criticism of the
government's pension reform program is driving Mikhail Kasyanov Soviet.
The prime minister, in
an act political observers say hasn't been committed since the country
went capitalist, sent an "official warning" to First Deputy
Economic Development and Trade Minister Mikhail Dmitriyev on Friday for
"multiple public disagreements with the government's position on
Observers say the
warning, which accused the outspoken Dmitriyev of "not fully matching
his professional requirements," reflects the high-stakes battle
brewing between vested interest groups -- both inside and outside the
government -- over changes to the pension system, which handles more than
$20 billion per year.
methods of administrative punishment were often used in the Soviet times,
but even then it was not at the governmental level," said Dmitry
Orlov, deputy head of the Center for Political Technologies.
Orlov said he was
surprised that the prime minister would resort to such public chastisement
unless Kasyanov felt it would be politically impoverishing to himself to
Kasyanov already would have," he said.
Dmitriyev has clashed
openly with Pension Fund chief Mikhail Zurabov, who enjoys Kasyanov's
support, by aggressively lobbying the government to introduce more
controls over the fund and create competition in the market for nonstate
Dmitriyev was also one
of the main critics of Kasyanov's decision to appoint Vneshekonombank, or
VEB, the government's foreign debt agent, as the official pension agent
too. Critics like Dmitriyev say VEB has a conflict of interest as it
invests pension money in government bonds.
In the latest issue of
the weekly newspaper Moskovskiye Novosti, Dmitriyev criticized Kasyanov
for essentially putting the cart before the horse. Kasyanov, he wrote,
with only two weeks' notice and without the approval of the ministries
involved in pension reform, signed a decree appointing VEB as the official
Pension Fund agent. In contrast, the Cabinet must approve at least 10
legislative acts before the July 1 target date for tenders to be organized
among private pension fund managers and "none of them has been
approved yet," Dmitriyev wrote.
were voiced in a recent report by the World Bank, which said that VEB's
appointment as agent should only be temporary because it prohibits
competition. In their current state, Russia's financial and administrative
systems cannot guarantee necessary safeguards to pensioners, the World
One economist involved
in the government's pension project said the public warning to Dmitriyev
shows how vulnerable Kasyanov is to public disputes concerning social
issues, especially with elections just months away.
considers all social questions to be a sacred cow and will not allow
anyone to influence the opinion of the most important part of
electorate," said the economist, who asked not to be named.
The warning was also a
pre-emptive strike to dissuade Dmitriyev from going public with his
criticisms of administrative reform, considered a necessity by the Kremlin
and political and economic experts alike.
problems we faced during pension reform show the urgent need to reform the
administrative system, which in fact threatens to block any new
initiatives," Dmitriyev wrote.