Russian President Vladimir Putin on Feb. 24 replaced Prime Minister Mikhail Kasyanov with Viktor Khristenko and dismissed his entire Cabinet of Ministers. According to the Russian Constitution, Putin must present a new head of government to the lower house of parliament, the Duma, within two weeks. This means Russia will have a new government in place before the March 14 presidential elections. As often is the case with his actions, Putin's move has generated questions about where it will take Russia as a world power. The issues that need to be addressed first and foremost are: Why has Putin done this now (just before the elections), and who will he appoint as the next premier? Answering these questions will shed light on where Putin plans to take Russia after he secures a second term — which is a near certainty. Putin dismissed his Cabinet primarily to raise interest in the presidential election and to give the impression that the polls are legitimate. Although Putin is almost guaranteed to win, he can ill afford elections in which few vote or alternative candidates withdraw. The underlying reasons for the dismissal, however, are linked to Putin's broader plans. He wants to revive Russia as a major world power on the basis of breakthroughs in high technology that would allow it to compete in world markets. This might work — but only if the government shares Putin's vision and speeds reforms to that end. The former government under Kasyanov — a member of the Yeltsin Family of oligarchs — did not meet these criteria and put the brakes on Putin's plans for restructuring out of fear that it might lose privileges. In order to strengthen Russia and develop a functional economy, Putin must take on the infamous Russian bureaucracy, which has not abandoned its pattern of procrastination and corruption since the Soviet Union collapsed. The same bureaucrats hold government offices, focusing first on their pocketbooks and second on how to avoid doing any work. Putin seems determined to break this centuries-old tradition, but STRATFOR has doubts about his ability to succeed. He plans to move forward with what he calls "administrative reform" — a dramatic revamping of government agencies' functions and an equally dramatic reduction of their personnel. In particular, Putin wants to reduce a number of ministries by one-third and transfer the control function from the Cabinet to his administration, STRATFOR sources in the Kremlin say. To implement these ambitious plans, Putin must choose as prime minister someone who is loyal — to him above all else — and capable of ensuring that the Cabinet is up to besting the challenges posed by reform. Some in the Russian political elite suggest that Putin should create a government focused on national accord and unity, sources in Moscow say. According to this proposal, an opposition figure, such as Grygory Yavlinsky or Sergei Glaziev, should be appointed to lead the government in order to unite all of Russia's political forces — some of which are striving for the same goals as Putin, only by other means. Ideally, placing an opposition figure in charge of the government would allow the various factions to abandon their disagreements in favor of pursuing economic and geopolitical revival. It is unlikely that a domestically strengthened Putin would agree to this, especially because he has just finished the lengthy and exhausting process of consolidating his power. This leaves Russia with the prospect of a Putin loyalist and technocrat leading what could fairly be called a one-party government. Several candidates fit the job profile. By Putin's design, the new prime minister's focus will be on achievements in the high-tech sector and implementing market reforms. This meshes well with the idea of a strong centralized government, which would further diminish the power of the oligarchs and downsize Russian bureaucracy. Putin already knows who he will nominate, but is concealing his choice even from his close associates, sources in his administration say. Putin does not want to be influenced even by his inner circle; he wants the new government to be his alone, not a mirror-image of the compromise government over which he presided during his first term. We are looking at four prime potential candidates. Among them is Anatoly Kudrin, whom STRATFOR pointed out in November as Kasyanov's most likely successor. Kudrin is the first vice premier and finance minister, a prominent leader in the liberal wing of the St. Petersburg clan and Putin's long-time associate. As opposed to Anatoly Chubais, another St. Petersburg liberal who has defended the oligarchs, Kudrin sided with Putin. The president very well might nominate Kudrin based on his intimate experience with Russian finance and economy, his stance on the oligarchs and his liberal pro-Western views. Acting Prime Minister Khristenko also has a good chance, despite most media labeling him as only an interim figure. A technocrat with economic, academic, regional government and financial management experience, Khristenko for years has supervised the most important industry in Russia — energy — and has managed not to disappoint Putin. The president also might appreciate that Khristenko was one of the first to break with the Family clan and side with Putin at a time when it was unclear whether the head of state would triumph over them. Khristenko's tenure as premier in the interim period could work in his favor: In the Russian tradition, high officials often first serve as interim appointees. Khristenko also quickly picked up the prevailing mood last fall, advocating new anti-trust regulations, licensing and taxes on natural resources — tactics Putin has used against the oligarchs. Vice Premier for Industry and Technology Boris Aleshin also has a chance. He has been at the heart of Russia's drive to develop its high-tech sector — which will be Putin's main focus during his second term. Aleshin supervises sectors critical for success on this path: the military-industrial complex, state investments, innovative policies, manufacturing sector exports, export control, trade and economic ties with other nations. He is the only member of the Russian Academy of Sciences currently serving in government. Aleshin is widely thought to understand the demands of the high-tech sector and how to manage the commercialization of technological invention. Putin would be hard-pressed to find a candidate with better technocratic credentials. He also has entrusted Aleshin with preparing administrative reform; it would be logical that a new prime minister would be responsible for implementing such reforms. On the other hand, the president could choose a dark-horse candidate from among the ranks of Putin loyalists not currently occupying top government positions. Some sources predict Putin will choose someone completely unexpected. An unknown candidate would come from the national security agencies or the Putin administration. Because Putin likely will not openly challenge the West by appointing a national security officer to lead the government, the nominee could come only from his administration. First Deputy Administration head Dmitry Kozak is the most likely choice from this camp. Known for his political correctness, scruples and diligence, Kozak befriended Putin while working with him for late St. Petersburg Mayor Anatoly Sobchak, a patron of Russian liberals in the early 1990s. A well-educated and experienced lawyer and technocrat with ties to none but Putin, Kozak would like to see Russia adopt a blend of liberal market and state capitalism — which Putin seems to welcome. Two other candidates have lower, but still realistic, chances and are worth mentioning. Defense Minister Sergei Ivanov is strong-willed and a close Putin ally. A polished national security bureaucrat, he commands some influence over the president, as sources in the Russian Security Council will attest. If this influence is strong enough, Putin might nominate him to a premier post. Still, he has only an outside chance: Aside from fearing a negative Western reaction, Putin likely will think twice about appointing Ivanov due his seemingly unlimited desire for power. Duma Speaker Boris Gryzlov — also a top leader of the pro-Putin United Russia Party and former interior minister — has a slim chance. Known as a campaign politician, his professional and technocratic credentials are nonexistent. His main quality seems to be loyalty to Putin and the ability to push others to accept the president's wishes. Gryzlov is rumored to have said, "If Putin ordered, I would throw myself out of the window." Although Putin certainly smiles upon loyalty, it likely will not be enough to gain Gryzlov a nomination. Other possible, but unlikely, candidates include Sergei Stepashin, head of Russia's Control and Accounting Chamber; Alexei Miller, career technocrat and head of Russian gas monopoly Gazprom; German Gref, St. Petersburg liberal, Putin friend and economic development minister; and two deputy heads of the presidential administration, Viktor Ivanov and Igor Sechin. Putin will name a new prime minister within the next 14 days, and shortly thereafter will be re-elected. We expect Putin to rapidly begin restructuring and downsizing the government, working toward reviving the manufacturing sector and boosting research, production and high-tech exports.