February 19, 2009 By Robert Amsterdam

Yakunin Gunning for Kudrin

yakunin021909.jpgNews from the front lines of Russia’s clan wars always seem to feature similar trends – inconsistent and sometimes contradicting information, use of the news media as warning bell, overlapping elements of oil, state-owned businesses, and specific points of fiscal policy as the key battlegrounds.  The latest news being reported by the FT is no different, as Vladimir Yakunin, a Putinite politico-executive and head of Russian Railways, has opened up yet another line of attack against Finance Minister Alexei Kudrin by demanding that the country immediately institute capital exchange controls to ensure that state funds being used to prop up the ruble aren’t immediately taken out of the country (it is, in a manner of speaking, the most blunt instrument used to fight capital flight, but usually only succeeds in creating lucrative black markets).

The comments from Yakunin reveal that the clan wars have taken on a new dispute – the strategy with which the government will fight inflation, which include various options featuring various degrees of political and economic costs (for example, a controlled slide to a free float would probably be best for the economy in the long run but could end up toppling a government).  The FT reports: