A PROFILE OF NEW KYRGYZ PM IGOR CHUDINOV

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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

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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
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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
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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
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4. (C) Chudinov's rapid ascent has generated much
speculation regarding business connections to the Bakiyev
family, especially to President Bakiyev's youngest son,

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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