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Russian military leaders have expressed concern about US plans for a national missile defense system. Will defense technology be limited by possibilities for a strategic imbalance? Is this just SDI all over again?

lunarchick - 01:46pm Mar 28, 2001 EST (#1611 of 1611)
lunarchick@www.com

Putin drafts civilians:
MORE CHANGES TO COME?

Breaking precedent, Putin appointed Deputy Finance Minister Lyubov Kudelina a deputy defence minister, the first woman in such a job in the ministry and one of the few in high office.

"It's a gain for the defence ministry and obviously a loss for the finance ministry," Putin told defence staff, explaining that Kudelina was an expert on financing the security forces.

She will need to demonstrate those skills as Russia cuts troop numbers, modernises equipment and aims for a fully professional force on a strictly limited budget. That in turn could help Ivanov deal with reluctant generals.

"Ivanov is Putin's creation, but he's very close to him which means he can most likely overrule opposition of the generals and get the support of the Kremlin," said Pavel Felgenhauer, an independent defence expert in Moscow.

Putin promised more eye-catching personnel changes.

Interfax news agency quoted a senior Kremlin source as saying: "Today's reshuffle is not part of the structural reorganisation of the government. That's still being worked on."

Kremlin sources have said Putin may announce during his April 3 state of the nation address, or soon after, that he plans to streamline Kremlin and government teams, which overlap.

The reshuffle was the first shake-up since Putin was elected on March 26 last year -- almost exactly a year ago. He did not announce major changes to other sectors of government, notably economic portfolios, but that could just be a matter of timing.

"It won't stop at appointments in the security forces," Ivanenko said. "I think we will soon see changes in the economic portfolios, and that could be much more interesting."

MARKETS INTRIGUED BUT UNMOVED

Russia, which is in danger of sliding into stagnation after oil-fuelled growth last year, faces crucial debt negotiations and is in talks with the International Monetary Fund.

Russian shares closed lower. Traders said the sluggish market shrugged off the reshuffle but was intrigued by prospects for a further cabinet reshuffle. The key RTS index closed off 0.98 percent at 173.46. The broader Reuters Russian composite was off 1.58 percent at 1,394.90.

Rumours about an "anniversary make-over" in the government have done the rounds and appeared in print for some weeks, but the scope of the changes was still something of a surprise.

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