World
Institutional
links
Welcome back on
26 -29 August,
ONS 2008
Bridging
the energy gap
is ONS 2006 theme,
from 22-25 August,
in Stavanger, Norway
Petroleumworld
Business
Partners:
Centre for
Global Energy
Studies
  |
Putin reshuffle keeps Russia on liberal economic course
By Dario Thuburn
AFP
MOSCOW
Petroleumworld.com 09 26 07
The cabinet reshuffle announced by President Vladimir Putin on Monday keeps Russia on a liberal economic course and underlines the president's control of the political scene, analysts said.
The main change announced was the promotion of Finance Minister Alexei Kudrin, a liberal economist who has earned a good reputation for sound financial management of Russia's oil riches.
Kudrin will now also serve as one of Russia's five deputy prime ministers alongside political heavyweights Sergei Ivanov and Dmitry Medvedev, both seen as leading candidates to replace Putin next year.
" Putin gave clear signals that the government would continue to follow current economic policy," Troika Dialog, a Moscow-based investment bank, said in a research note on Tuesday.
Russia, the world's largest oil producer, has averaged annual GDP growth of around seven percent since Putin came to power and has seen ever rising levels of investment in the economy.
Kudrin in particular has been praised in financial circles for not rushing to spend oil profits and keeping them in the Stabilisation Fund, which now holds more than 130 billion dollars (92 billion euros).
" We view the strengthening of Kudrin's position as positive, and believe it will help to rein in fiscal spending in the near term," ING Bank commented.
Erik DePoy, an analyst with Alfa Bank, was also upbeat.
" It's certainly positive in terms of the government's fiscal strength. Kudrin has kept a very close watch on the government's finances," he said.
DePoy also said Kudrin's appointment was intended to reassure investors concerned about the possible effects of a credit crunch on global markets following a mortgage payments crisis in the United States.
" The finance ministry will be working closely with the central bank to ensure that liquidity remains available on the local market and there will be no sort of banking crisis or debt crisis," DePoy said.
Deutsche UFG, another investment bank, praised Kudrin's "paramount role in securing Russia's macroeconomic stability" and credited him with "the creation of a veritable economic miracle in Russia, namely the Stabilisation Fund."
Business analysts also hailed the appointment of Elvira Nabiullina, head of a respected economic think tank in Moscow, as Russia's new minister for economic development and trade.
" Her appointment, together with Kudrin's promotion, is a sign that the liberal team's position in the government has improved. We expect the stock market to react positive to the shuffle," investment bank Troika Dialog said.
Alexei Morozov, an analyst from UBS bank said the promotion of Kudrin and the appointment of Nabiullina made the cabinet "the most reformist government in perhaps five years."
Russian observers meanwhile commented on the secrecy in which the new appointments were shrouded right up to Putin's announcement on Monday, interpreted as a sign of the president's power.
Putin "has left in power people who can guarantee his policies after his departure," said Nikolai Zlobin, Russia analyst with the World Security Institute in Washington.
Putin is due to step down after presidential elections in March 2008 but has emphasised he wants to be in control right up to his resignation and has also hinted he will retain influence after that.
" The government is gradually losing its powers, politicians are being replaced by technocrats," said Stanislav Belkovsky from the National Strategy Institute in Moscow.
" The main political decisions will now be taken outside the government. They will take place in the Kremlin or inside the state companies that are currently being created," he added.
AFP 25 1136 GMT 09 07
Copyright© 2007 Petroleumworld. All rights reserved.
Your
feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com
Any
question or suggestions, please write to:
editor@petroleumworld.com
Best
Viewed with IE
5.01+
Windows
NT 4.0, '95, '98 and ME +/ 800x600 pixels