A PROFILE OF NEW KYRGYZ PM IGOR CHUDINOV

C O N F I D E N T I A L SECTION 01 OF 02 BISHKEK 000005 SIPDIS SIPDIS DEPT FOR SCA/CEN (GEHRENBECK) E.O. 12958: DECL: 01/04/2018 TAGS: PGOV PREL PINR KG SUBJECT: A PROFILE OF NEW KYRGYZ PM IGOR CHUDINOV BISHKEK 00000005 001.2 OF 002 Classified By: Charge d'Affaires Lee Litzenberger for Reasons 1.4 (b) a nd (d) ¶1. (C) Summary: Kyrgyz President Bakiyev's December 24 appointment of Igor Chudinov as the new Kyrgyz prime minister marks the apex of Chudinov's rapid ascent from relative political obscurity. After years as a communist functionary and businessman, Chudinov secured the top position at the Kyrgyz national natural gas company in the aftermath of the March 2005 "Tulip Revolution" and subsequently took charge of the ministry handling industrial, fuel and energy issues before being tapped for the prime ministerial post. Chudinov's close ties to President Bakiyev's family, especially the President's son Maxim, are believed to overlap with Bakiyev family business interests - to include the Kyrgyz electricity sector. In addition to the business links, Chudinov is an ideal prime minister for President Bakiyev. As an ethnic Russian, he lacks a separate political power base, and thus does not present a challenge to Bakiyev family interests. His "outsider" status may enable him to implement natural gas and electricity tariff hikes, while benefiting Bakiyev family interests in the expected "privatization" of energy sector assets. End Summary. Taking Charge -------------- ¶2. (U) Kyrgyz President Bakiyev appointed Igor Chudinov, a 46 year-old ethnic Russian, prime minister on December 24. Chudinov replaced ex-PM Almazbek Atambayev, and his appointment permitted Acting PM Iskender Aidaraliyev to return to his post as first deputy prime minister. While somehow dodging the constitutional requirement for the prime minister to speak Kyrgyz, Chudinov pledged that governmental appointments should be "based on professional qualities, rather than on political views." Meanwhile, he outlined a few short-term priorities of his government: 1) securing fuel supplies; 2) addressing winter-related problems; 3) assisting farmers with the spring planting season; and 4) providing farmers with seeds and petroleum products. (Note: Kyrgyz media have since reported Kyrgyz agreement to purchase Uzbek natural gas at a price of $145 per thousand cubic meters, up from the previous $100 rate. End note.) Chudinov also outlined his intent to increase tax revenues through legalization of the "grey" economy, which he estimated accounted for up to 52% of the Kyrgyz economy. Rising to the Top -------------- ¶3. (U) PM Chudinov,s rapid political ascent, which started after the March 2005 "Tulip Revolution" that ousted former President Askar Akayev, follows a relatively undistinguished career. Before 2005, Chudinov had several small business ventures, including part-ownership of a popular Bishkek restaurant (the "Admiral"). He also served as a high-level functionary within the Communist Party Youth Organization from 1986-1991. Chudinov worked briefly as an engineer following his 1983 graduation from the Kyrgyz National University with a degree in computer technology. After the March 2005 "Tulip Revolution," Chudinov assumed the top position at the national natural gas company, "Kyrgyzgaz," and subsequently became the first Minister of Industry, Energy and Fuel Resources when the ministry was created in February 2007. He held the ministerial job until his appointment as prime minister. Rumored Links to the Bakiyev Family -------------- ¶4. (C) Chudinov's rapid ascent has generated much speculation regarding business connections to the Bakiyev family, especially to President Bakiyev's youngest son, BISHKEK 00000005 002.2 OF 002 Maxim. Maxim Bakiyev's name has been associated with various business activities to include banking and telecommunications in the Kyrgyz Republic. Maxim Bakiyev's interests are also believed to extend to the Kyrgyz electricity sector, which suffers from substantial "technical losses" and theft. PM Chudinov, as well as his successor at the Ministry of Industry, Energy and Fuel Resources, Saparbek Balkibekov, are well-placed to protect Bakiyev family interests in the electricity and energy sectors. Given President Bakiyev's selection and endorsement of Chudinov, it is unlikely that Chudinov would interfere in any Bakiyev family business interests. Other Political Considerations -------------- ¶5. (C) Aside from (substantial) business considerations, Chudinov's appointment as prime minister also has other benefits for the Bakiyev family. Unlike two of his recent predecessors (Felix Kulov and Almazbek Atambayev),Chudinov has no separate political following and does not present a challenge to the Bakiyevs. In a country with geographic, clan-based allegiances, an ethnic Russian "outsider" can be viewed as a "neutral actor." Chudinov's ethnicity could also benefit ties with Moscow. While previous Embassy interaction with Chudinov indicates that he is intelligent and open-minded, PM Chudinov has never publicly contradicted President Bakiyev's policies and is very circumspect in his public remarks. ¶6. (C) This combination of factors makes Chudinov an ideal candidate to tackle contentious issues such as hikes in natural gas and electricity tariffs, pushing through an agreement on the Canadian-run Kumtor gold mine, food price inflation and other topics. PM Chudinov will likely oversee the "privatization" of significant electricity and energy sector assets (to the potential benefit of the Bakiyev family and other connected interests),while also pursuing the completion of the multi-billion dollar Kambarata hydroelectric complex. While the longevity of recent Kyrgyz prime ministers does not provide PM Chudinov a sense of job security, unlike recent prime ministers he is truly President Bakiyev's hand-picked candidate. His longevity, though, will depend on the extent to which he can deliver on Bakyiev's pledge to bring economic growth to the Kyrgyz Republic. LITZENBERGER