Kudrin: Russia's liberal survivor breaks ranks

25th September 2011, Comments 0 comments

Finance Minister Alexei Kudrin, who on Sunday broke ranks from a plan to install Dmitry Medvedev as prime minister, is the last surviving remnant in the Russian government from the days of post-Soviet liberal reform.

The longest-serving finance minister of any major world power, Kudrin has occupied his post since the first months of Vladimir Putin's presidency in 2000 and guided the economy through cycles of growth and recession.

Kudrin has won international plaudits for keeping a stable ruble and cannily building up sovereign wealth funds that protected Russia from a repeat of its 1998 financial meltdown when global economic crisis struck in 2008.

But now his decade-long grip on Russia's top public finance post appears to be nearing an end after he refused to serve in a government headed by current President Medvedev.

Medvedev becoming prime minister is a key part of Russia's new political strategy which will see Putin stand in presidential elections in 2012 and the current Kremlin chief step aside.

Dropping the caution characteristic of a trained economist, Kudrin revealed that he had experienced major differences with Medvedev, particularly over a ramping up of military spending that risks bloating the budget deficit.

"I do not see myself in the new government. It's not just that nobody offered me anything. I think that the differences that I have will not allow me to be in this government," Kudrin said.

Crucially, Kudrin said that increasing such spending would prevent Russia weaning itself off its dependence on oil exports, a dangerous reliance that risks causing a major crisis when the price of crude comes off current highs.

But the graduate of Leningrad (now Saint Petersburg) State University had already in past months shown signs of dissatisfaction with Russia's course under the dominance of ruling party United Russia and its tandem leaders.

He provoked a furious reaction from United Russia at a conference in February when he said that only "free and honest" elections would provide the mandate to carry out the reform that the economy urgently needed.

Kudrin also said that Russia was at a "historic" crosswords where it had to decide whether to retain its dependence on hydrocarbons or genuinely diversify the economy.

"Will we in the next 5-10 years tear ourselves away from this dependence, get off this needle, or won't we? This is the question," he said.

Kudrin, 50, entered the federal government under president Boris Yeltsin, first working as deputy Kremlin chief of staff and then as deputy finance minister before becoming finance minister in May 2000.

Along with the then reform-inclined economy minister German Gref, Kudrin drew up a landmark strategy to transform the Russian economy by 2020 that ended up being weakened when liberals one-by-one dropped out of power.

But despite the minister's reputation for independent thinking, Putin kept Kudrin in his post, clearly thankful for his steady hand that allowed Russians to enjoy unprecedented economic stability.

Nikita Belykh, governor of the northern Kirov region and like Kudrin one of the few critics of United Russia to occupy a significant post in Putin's Russia, said his departure from the government would be a "very serious loss".

"People of such profile and authority simply do not exist. For many businessmen and international organisations he is a symbol that economic policy will not completely slide into populism," he told Moscow Echo radio.

Putin's spokesman Dmitry Peskov Sunday described Kudrin as an "economist and professional in capital letters who had never hidden a different point of view."

Kudrin's comments that he would not serve under Medvedev were "his right which we all relate to with great respect as the point of view of a top professional," Peskov said.

© 2011 AFP

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