Kudrin and Fiscal Discipline in Russia
Russia’s Finance Minister Alexei Kudrin is an interesting character. Thrust into the center of the clan wars for holding the keys to the country’s massive stabilization fund, the occasionally outspoken technocrat has openly contradicted Vladimir Putin in public not once but twice, and is known for saying exactly what Western finance loves to hear from a government official. Kudrin was able to narrowly escape the siloviki witch hunt which snagged his #2 man Sergei Storchak by splitting the stabilization fund and creating a separate sovereign wealth fund (of a “modest” $32 billion), allowing some of his opponents some state resources to play speculation games with in foreign securities and strategic assets. Today Alexei Kudrin speaks with the Financial Times, and yet again openly criticizes Putin’s economic policy (on the freezing of food prices). The interview depicts Kudrin as fighting against powerful forces within the Russian government to keep spending down, despite the ballooning state coffers from high oil and gas prices. “Russia’s economy emerged from the Communist command economy, so some people lack an understanding of market mechanisms,” he says. “They think if the state has money it can solve any problem.” It takes quite a uniquely influential person to disagree with Putin so publicly so often.