The dramatic – some would say theatrical – exit of Alexei Kudrin as
Russia’s finance minister couldn’t have come at a worst time. The world economy is incredibly fragile and oil prices are in flux. But is Kudrin, highly respected for his fiscal policies
and a member of Putin’s inner circle, merely pushing for promotion?
With the ruble slumping to a 28-month low yesterday, there are signs the market is worried over the loss of a finance minister who prudently curbed Russia’s budgetary excesses and far-sightedly built up its oil wealth funds. “Kudrin’s resignation will be a big blow for the Russian economy – experts are already forecasting a new wave of capital flight, a fall in the ruble rate and inflation growth,” lamented the daily Vedomosti.
While Kudrin’s absence won’t affect the Russian economy hugely in the short term, one can see how an equally cautious financial tsar would be needed in coming years to curb the likely extravagances of yet another Putin presidency.
But already there’s talk that Kudrin may come back as the central bank chief in a Putin administration. John Bonar at Russian business news-site BSR goes even further: he thinks the whole exit was deliberately engineered, and “the fight Kudrin picked with Medvedev is entirely the finance minister’s own making” to push for an even more powerful position.
Bonar quotes former PM Mikhail Kasyanov: Kudrin “has already served as finance minister for 11 years; he is tired of it. He wanted either to leave or to get a new job, a promotion. And naturally, he wants to be prime minister.”
RBS’s head of emerging-market strategy, Timothy Ash is more circumspect. “Experience with Putin’s Russia suggests that most political events are closely ‘managed’,” he says in an email. “That said, I find it difficult to imagine that the manner of Kudrin’s departure fits into a managed script.
“Indeed, given the acutely difficult global market environment, and Russia’s own vulnerabilities… it is difficult to conceive that the administration would have wanted to have lost its
most trusted and capable economic manager.”
Watch a video of Kudrin’s dramatic exit.
Comments