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TIMES STAFF WRITER

Taking his first big step as Russia’s new president, Vladimir V. Putin on Wednesday nominated a former Soviet economic planner-turned-debt negotiator to serve as prime minister.

The selection of Mikhail M. Kasyanov, long hinted by the Kremlin, is designed to show that the new government’s top priority is fixing the economy. Kasyanov, who has served as first deputy prime minister since January, is expected to win quick confirmation by the parliament.

“This decision demonstrates that Putin, in contrast to [former President Boris N.] Yeltsin, is a predictable leader and his moves can be anticipated. This creates credibility and trust,” said Mikhail G. Delyagin, a former government economic advisor and the director of Moscow’s Institute for Globalization Problems.

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Kasyanov, like Putin, was trained as a Soviet apparatchik but has managed to retool himself for the post-Soviet era. He is well known in the West, as he has long represented Russia in negotiations with international creditors such as the International Monetary Fund. He is fluent in English.

“He’s not a man with strong ideas or stated ideas. He’s not a visionary,” said Peter Boone, director of research at the Brunswick Warburg investment firm in Moscow. “But he understands finance better than most bankers in the West.”

Kasyanov, 42, is a burly man with a rumbling voice and a banker’s wardrobe. He is expected to play a less powerful role than previous prime ministers because he will be serving under a strong, healthy president. Like his boss, he talks more about effective economic management than about market reforms.

“My experience as a negotiator has taught me this credo: Move forward not by fits and starts, but gradually, persistently, consistently and--this is the main thing--always in the same direction,” Kasyanov said in a recent interview with the Argumenti i Fakti newspaper.

Kasyanov is part of a new class of economic decision makers in Russia. In the first years after the Soviet collapse, Yeltsin promoted a group of Western-trained economists, including former Prime Minister Yegor T. Gaidar, who designed and implemented what were described as radical market reforms. Their efforts have been largely discredited, in part because they emphasized fiscal and monetary policies and failed to address structural problems, and in part because they helped nurture a class of oligarchs widely viewed as corrupt.

Putin and Kasyanov, by contrast, were schooled in Soviet management. They de-emphasize ideology and prefer to rely on a mixture of economic approaches, sometimes emphasizing the role of the market and sometimes increasing state regulation. They also advocate moderation, which appeals to Russians weary of economic hardship.

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“The main thing for me is that in recent years, [Kasyanov] hasn’t been associated with any particular movement, such as Gaidar,” said Nikolai I. Ryzhkov, leader of the Communist-allied People’s Power parliament faction.

However, the rumor mill has tied Kasyanov to a group of oligarchs led by media baron Boris A. Berezovsky and his associate Roman A. Abramovich. The two are reputed to be the financial power behind Yeltsin’s entourage, known as “The Family,” which promoted Putin for president and retains many top positions in Putin’s administration.

“The appointment of Kasyanov means Putin so far is keeping his obligations to the old Kremlin ‘Family,’ ” said Liliya F. Shevtsova, a political analyst with the Carnegie Moscow Center think tank. “Kasyanov however is a loyalist by nature. So he will try to distance himself from the old ties with the Kremlin staff and will try to truly and obediently serve the new boss. He will try to be a pragmatic technocrat. But as we know, it is difficult to run away from your past.”

Allegations of corruption also swirl around Kasyanov, as they do around many Cabinet ministers. His nickname in the Kremlin is said to be “Misha 2%,” a reference to his alleged usual fee. However, little hard evidence has surfaced to support such allegations.

Russian lawmakers said they anticipate no serious opposition to Kasyanov’s nomination, especially since they are eager to curry favor with the new president.

Kasyanov graduated in 1983 from the Moscow Automobile and Road Construction Institute as an engineer, and spent nine years working at the Soviet economic planning ministry, Gosplan. In 1991 he began to work in the Economics Ministry’s department of foreign economic relations, becoming chief of its foreign debt department in 1993. He was named deputy finance minister in 1995, and finance minister last year.

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Kasyanov is widely credited with negotiating a landmark agreement in February to write off 37% of Russia’s $32 billion in Soviet-era debt. The agreement with the London Club group of creditors also gave Russia a seven-year grace period before it has to start paying down the remaining principal.

For the most part, Kasyanov is expected to be a doer, not a thinker. Putin is expected to take a far more active role than Yeltsin in setting government policy and has already chosen two others to set economic policy: Andrei Illarionov, a pro-market economist who has been named chief economic advisor, and German Gref, head of the Center for Strategic Planning, an economic think tank here. Putin has asked Gref to draw up an economic program.

“The good thing for Kasyanov and his Cabinet is that he’s not seen as a public politician and his government, at least for the time being, is seen as a purely technical government,” Delyagin said. “It will be Putin and the Kremlin staff who are held responsible for whatever is to come, and not Kasyanov’s government.”

Russia’s economy has been rebounding in recent months, buoyed by oil revenue and increased domestic production. The federal budget is in its best shape since the nation’s 1998 financial collapse; tax revenues are up, and the government is running a surplus despite the war in Chechnya. Russia has continued to make payments to the International Monetary Fund on time and in full, even though it has received no new money from the fund since 1998.

However, the economic recovery is still fragile. In real terms, Russians’ incomes remain a fraction of what they were before the financial crisis, and consumer demand is too weak to support long-term growth. Moreover, much of the current boom is based on oil revenue, and a sustained decline in world oil prices could put the federal budget in the red and force unpopular cuts in social spending.

After confirmation, Kasyanov’s first job will be to form a Cabinet. He said he expects only minor changes in the current lineup, chosen by Putin when he served as prime minister until Yeltsin’s resignation in December.

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The “power ministers”--those in charge of defense, foreign affairs, the interior, emergencies and the KGB’s main successor, the Federal Security Service--are expected to keep their posts.

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