Alexei Kudrin
Encyclopedia
Alexei Leonidovich Kudrin (born 12 October 1960) was the Minister of Finance and Deputy Prime Minister
of Russia
from 18 May 2000 to 26 September 2011. After graduating with degrees in finance and economics, Kudrin worked in the administration of Saint Petersburg
's liberal Mayor Anatoly Sobchak
. In 1996 he started working in the Presidential Administration of Boris Yeltsin
. He was appointed Finance Minister on 28 May 2000, and has held the post ever since, making him the longest-serving Finance Minister in post-Soviet Russia. In addition, he has been Deputy Prime Minister in 2000-2004 and again since 2007. As Finance Minister, Kudrin is widely credited with prudent fiscal management, commitment to tax and budget reform and championing the free market
.
Under Kudrin, Russia's government paid most of the substantial foreign debt it had accumulated in the 1990s, leaving the country with one of the lowest foreign debts among major economies. Much of the revenue from exports was accumulated at the Stabilization Fund
which helped Russia to come out out of the 2008-2009 global financial crisis in a much better state than many experts had expected. During his career, Kudrin has won several awards, including the "Finance Minister of the Year 2010" prize from Euromoney magazine. He was asked to resign from his position on 26 September 2011 by President Dmitry Medvedev
.
, Latvian Soviet Socialist Republic. His first job was a motor mechanic and training assistant at the engine laboratory of the Academy of Procurement and Transportation of the Defense Ministry of the Soviet Union, before entering Leningrad State University to study economy. He graduated in 1983, and got an internship at the Leningrad Institute of Social and Economic Problems. In December 1985, he entered the internal postgraduate school at the Institute of Economics of the Academy of Sciences of the Soviet Union, where he later received his PhD. He then worked as a researcher at the Institute of Social and Economic Problems of the Academy of Sciences. Kudrin has authored over 15 scientific works in the fields economics and finance, including topics such as competition and anti-monopoly policy in the Soviet economy of the transition period.
Saint Petersburg City Administration
under the liberal mayor and reformer Anatoly Sobchak
. His first position was Vice Chairman of the Committee for Economic Reform. Until 1993, he worked in various financial positions in the city administration, before he was promoted to Deputy Mayor, in which position he served from 1993 to 1996. Future President Vladimir Putin
was the other top Deputy Mayor of Saint Petersburg at the time. Kudrin was also Chairman of the City Administration’s Economic and Finance Committee.
's presidential administration
, as well as Chief of the Administration on Trade, Economic and Scientific-Technological Cooperation. In March 1997, he became First Deputy Finance Minister, and on 28 May 2000, he was appointed Finance Minister by the new President Vladimir Putin
. In addition to his role as Finance Minister, Kudrin has been serving as one of the Deputy Prime Ministers of Russia in 2000-2004 and again since September 2007.
as the leading intellectual forces in crafting of the economic policies of the Putin and Medvedev presidencies. According to Simon Pirani, Kudrin has balanced the influence of the siloviki in the government with a financial sobriety.
is widely regarded as Kudrin's idea. Alexander Osin, chief economist at Finam Management, regards the Stabilization Fund as one of Kudrin's main achievements. However, other analysts have described The Stabilization Fund as "dead money", which doesn't benefit the real economy. The Stabilization Fund was split into the Reserve Fund and National Welfare Fund in February 2008.
In 2005, Kudrin and Prime Minister Mikhail Fradkov
clashed over a proposal to cut VAT tax from 18% to 13%. Fradkov supported the proposal, but Kudrin argued that lower VAT could endanger stability of the ruble and would cause the government to withdraw money from the stabilization fund. The same year, Kudrin received the "Finance Minister of the Year 2005" award by the Banker magazine.
On 21 August 2006, Russia paid its debts, totalling $23.7 billion to the Paris Club
. Simon Pirani, writing for Emerging Markets, praised Kudrin's refusal to be "blown off course by other ministers' whims" in his quest to repay the debt. He also credited Kudrin with sound conduct of the ruble exchange rate and capable fiscal management that has arguable helped to prevent the most serious problems of the so-called Dutch disease
. In 2006 Kudrin received the award "Best Finance Minister of a Developing European Country" by the Emerging Markets newspaper, published by the IMF and the World Bank.
As the father and supporter of the prudent fiscal management policies, Kudrin had to endure strong criticism from other members of the government, who believed the money should instead be invested in the country's development. In the end, Kudrin's stance prevailed. The savings later proved crucial in helping Russia to come out of the financial crisis in a much better state than many experts had expected, and Kudrin was widely credited for his policies.
. Kudrin has said that the state's role in the oil industry should not be increased, and has indicated that the purchase of Sibneft by Gazprom
and the merger of some former Yukos
assets to state-controlled oil company Rosneft
were taken at a particular stage of the restructuring of the sector. According to Kudrin, "no-one regards state ownership of such assets as an end in itself" and "we are not going to see a continuous strengthening of the state’s position."
As Finance Minister, Kudrin has also supported increasing the retirement age and cutting down on bureaucracy. For his policies, he has often been the target of criticism, especially from the United Russia
party, which he has refused to join. According to Renaissance Capital, Kudrin's poll ratings are not favourable as he is seen as responsible for some highly criticized welfare reforms, although economic experts say that the reforms proved to be highly effective.
In the award ceremony, Kudrin said: "Russia has already learnt this lesson; it was able to prepare and pass through this period. In this context, this is a result. And when you see your result, you feel satisfied. And when the result is praised by the professional community, it is especially important."
Deputy Prime Minister
A deputy prime minister or vice prime minister is, in some counties, a government minister who can take the position of acting prime minister when the prime minister is temporarily absent. The position is often likened to that of a vice president, but is significantly different, though both...
of Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
from 18 May 2000 to 26 September 2011. After graduating with degrees in finance and economics, Kudrin worked in the administration of Saint Petersburg
Saint Petersburg
Saint Petersburg is a city and a federal subject of Russia located on the Neva River at the head of the Gulf of Finland on the Baltic Sea...
's liberal Mayor Anatoly Sobchak
Anatoly Sobchak
Anatoly Alexandrovich Sobchak was a Russian politician, a co-author of the Constitution of the Russian Federation, the first democratically elected mayor of Saint Petersburg, and a mentor and teacher of both Vladimir Putin and Dmitry Medvedev....
. In 1996 he started working in the Presidential Administration of Boris Yeltsin
Boris Yeltsin
Boris Nikolayevich Yeltsin was the first President of the Russian Federation, serving from 1991 to 1999.Originally a supporter of Mikhail Gorbachev, Yeltsin emerged under the perestroika reforms as one of Gorbachev's most powerful political opponents. On 29 May 1990 he was elected the chairman of...
. He was appointed Finance Minister on 28 May 2000, and has held the post ever since, making him the longest-serving Finance Minister in post-Soviet Russia. In addition, he has been Deputy Prime Minister in 2000-2004 and again since 2007. As Finance Minister, Kudrin is widely credited with prudent fiscal management, commitment to tax and budget reform and championing the free market
Free market
A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...
.
Under Kudrin, Russia's government paid most of the substantial foreign debt it had accumulated in the 1990s, leaving the country with one of the lowest foreign debts among major economies. Much of the revenue from exports was accumulated at the Stabilization Fund
Stabilization Fund of the Russian Federation
The Stabilization fund of the Russian Federation wasestablished by resolution of the Government of Russia on January 1, 2004, as a part of the federal budget to balance the...
which helped Russia to come out out of the 2008-2009 global financial crisis in a much better state than many experts had expected. During his career, Kudrin has won several awards, including the "Finance Minister of the Year 2010" prize from Euromoney magazine. He was asked to resign from his position on 26 September 2011 by President Dmitry Medvedev
Dmitry Medvedev
Dmitry Anatolyevich Medvedev is the third President of the Russian Federation.Born to a family of academics, Medvedev graduated from the Law Department of Leningrad State University in 1987. He defended his dissertation in 1990 and worked as a docent at his alma mater, now renamed to Saint...
.
Early life and education
Alexei Kudrin was born on 12 October 1960 in DobeleDobele
Dobele is a town in the cultural region Zemgale in Latvia, and is located near the center of Latvia on the banks of the river Bērze. It received town rights in 1917 whilst being a part of the German occupied Courland Governorate during the First World War...
, Latvian Soviet Socialist Republic. His first job was a motor mechanic and training assistant at the engine laboratory of the Academy of Procurement and Transportation of the Defense Ministry of the Soviet Union, before entering Leningrad State University to study economy. He graduated in 1983, and got an internship at the Leningrad Institute of Social and Economic Problems. In December 1985, he entered the internal postgraduate school at the Institute of Economics of the Academy of Sciences of the Soviet Union, where he later received his PhD. He then worked as a researcher at the Institute of Social and Economic Problems of the Academy of Sciences. Kudrin has authored over 15 scientific works in the fields economics and finance, including topics such as competition and anti-monopoly policy in the Soviet economy of the transition period.
Saint Petersburg administration
From 1990 to 1996, Kudrin worked in the Saint PetersburgSaint Petersburg
Saint Petersburg is a city and a federal subject of Russia located on the Neva River at the head of the Gulf of Finland on the Baltic Sea...
Saint Petersburg City Administration
Saint Petersburg City Administration
Saint Petersburg City Administration is the superior executive body of Saint Petersburg , Russian Federation. It is located in a historic building, Smolny....
under the liberal mayor and reformer Anatoly Sobchak
Anatoly Sobchak
Anatoly Alexandrovich Sobchak was a Russian politician, a co-author of the Constitution of the Russian Federation, the first democratically elected mayor of Saint Petersburg, and a mentor and teacher of both Vladimir Putin and Dmitry Medvedev....
. His first position was Vice Chairman of the Committee for Economic Reform. Until 1993, he worked in various financial positions in the city administration, before he was promoted to Deputy Mayor, in which position he served from 1993 to 1996. Future President Vladimir Putin
Vladimir Putin
Vladimir Vladimirovich Putin served as the second President of the Russian Federation and is the current Prime Minister of Russia, as well as chairman of United Russia and Chairman of the Council of Ministers of the Union of Russia and Belarus. He became acting President on 31 December 1999, when...
was the other top Deputy Mayor of Saint Petersburg at the time. Kudrin was also Chairman of the City Administration’s Economic and Finance Committee.
Presidential administration
In August 1996, Kudrin was appointed Deputy Chief of Boris YeltsinBoris Yeltsin
Boris Nikolayevich Yeltsin was the first President of the Russian Federation, serving from 1991 to 1999.Originally a supporter of Mikhail Gorbachev, Yeltsin emerged under the perestroika reforms as one of Gorbachev's most powerful political opponents. On 29 May 1990 he was elected the chairman of...
's presidential administration
Presidential Administration of Russia
The Presidential Administration of Russia ) is the executive office of Russia's president created by a decree of Boris Yeltsin on 19 July 1991 as an institution supporting the activity of the president and vice-president The Presidential Administration of Russia (also known as Staff of Russia’s...
, as well as Chief of the Administration on Trade, Economic and Scientific-Technological Cooperation. In March 1997, he became First Deputy Finance Minister, and on 28 May 2000, he was appointed Finance Minister by the new President Vladimir Putin
Vladimir Putin
Vladimir Vladimirovich Putin served as the second President of the Russian Federation and is the current Prime Minister of Russia, as well as chairman of United Russia and Chairman of the Council of Ministers of the Union of Russia and Belarus. He became acting President on 31 December 1999, when...
. In addition to his role as Finance Minister, Kudrin has been serving as one of the Deputy Prime Ministers of Russia in 2000-2004 and again since September 2007.
Personal life
Kudrin is married, and has a son from his current and a daughter from his previous marriage. His hobbies include tennis, swimming and music.Finance minister
Since his appointment as Finance Minister in May 2000, Kudrin has been one of the most visible and influential figures in the Russian government. Kudrin belongs to the group of so-called "St Petersburg economists"—liberal reformers who worked with Putin during his time in the St Petersburg administration—one of the three main informal groups during Putin's presidency. John P. Willerton regards Kudrin and German GrefGerman Gref
German Oskarovich Gref , born February 8, 1964) is a Russian economist of German ethnicity, the founder of Center of the Strategic Development. He was the Minister of Economics and Trade of Russia from May 2000 to September 2007...
as the leading intellectual forces in crafting of the economic policies of the Putin and Medvedev presidencies. According to Simon Pirani, Kudrin has balanced the influence of the siloviki in the government with a financial sobriety.
Prudent fiscal management
During Putin's presidency, Russia's macroeconomic policies were highly prudent, and extra income from oil exports was put in stabilization funds. The Stabilization Fund of the Russian FederationStabilization Fund of the Russian Federation
The Stabilization fund of the Russian Federation wasestablished by resolution of the Government of Russia on January 1, 2004, as a part of the federal budget to balance the...
is widely regarded as Kudrin's idea. Alexander Osin, chief economist at Finam Management, regards the Stabilization Fund as one of Kudrin's main achievements. However, other analysts have described The Stabilization Fund as "dead money", which doesn't benefit the real economy. The Stabilization Fund was split into the Reserve Fund and National Welfare Fund in February 2008.
In 2005, Kudrin and Prime Minister Mikhail Fradkov
Mikhail Fradkov
Mikhail Yefimovich Fradkov is a Russian politician and statesman who was the Prime Minister of Russia from March 2004 to September 2007. Fradkov has been the head of Russia's Foreign Intelligence Service since 2007.-Early life:...
clashed over a proposal to cut VAT tax from 18% to 13%. Fradkov supported the proposal, but Kudrin argued that lower VAT could endanger stability of the ruble and would cause the government to withdraw money from the stabilization fund. The same year, Kudrin received the "Finance Minister of the Year 2005" award by the Banker magazine.
On 21 August 2006, Russia paid its debts, totalling $23.7 billion to the Paris Club
Paris Club
The Paris Club is an informal group of financial officials from 19 of some of the world's biggest economies, which provides financial services such as war funding, debt restructuring, debt relief, and debt cancellation to indebted countries and their creditors...
. Simon Pirani, writing for Emerging Markets, praised Kudrin's refusal to be "blown off course by other ministers' whims" in his quest to repay the debt. He also credited Kudrin with sound conduct of the ruble exchange rate and capable fiscal management that has arguable helped to prevent the most serious problems of the so-called Dutch disease
Dutch disease
In economics, the Dutch disease is a concept that purportedly explains the apparent relationship between the increase in exploitation of natural resources and a decline in the manufacturing sector...
. In 2006 Kudrin received the award "Best Finance Minister of a Developing European Country" by the Emerging Markets newspaper, published by the IMF and the World Bank.
As the father and supporter of the prudent fiscal management policies, Kudrin had to endure strong criticism from other members of the government, who believed the money should instead be invested in the country's development. In the end, Kudrin's stance prevailed. The savings later proved crucial in helping Russia to come out of the financial crisis in a much better state than many experts had expected, and Kudrin was widely credited for his policies.
Other policy stances
Although he has often spoken in favour of privatisation and lessening the state role in economy, Kudrin also supported the creation of the so-called national championsNational champions
National champion is a political concept in which large corporations in strategic sectors are expected not only to seek profit but also to "advance the interests of the nation.”This policy has been popular and practiced by many countries....
. Kudrin has said that the state's role in the oil industry should not be increased, and has indicated that the purchase of Sibneft by Gazprom
Gazprom
Open Joint Stock Company Gazprom is the largest extractor of natural gas in the world and the largest Russian company. Its headquarters are in Cheryomushki District, South-Western Administrative Okrug, Moscow...
and the merger of some former Yukos
YUKOS
OJSC "Yukos Oil Company" was a petroleum company in Russia which, until 2003, was controlled by Russian oligarch Mikhail Khodorkovsky and a number of other prominent Russian businessmen. After Yukos was bankrupted, Khodorkovsky was convicted and sent to prison.Yukos headquarters was located in...
assets to state-controlled oil company Rosneft
Rosneft
Rosneft is an integrated oil company majority owned by the Government of Russia. Rosneft is headquartered in Moscow’s Balchug district near the Kremlin, across the Moskva river...
were taken at a particular stage of the restructuring of the sector. According to Kudrin, "no-one regards state ownership of such assets as an end in itself" and "we are not going to see a continuous strengthening of the state’s position."
As Finance Minister, Kudrin has also supported increasing the retirement age and cutting down on bureaucracy. For his policies, he has often been the target of criticism, especially from the United Russia
United Russia
United Russia is a centrist political party in Russia and the largest party in the country, currently holding 315 of the 450 seats in the State Duma. The party was founded in December 2001, through a merger of the Unity and Fatherland-All Russia parties...
party, which he has refused to join. According to Renaissance Capital, Kudrin's poll ratings are not favourable as he is seen as responsible for some highly criticized welfare reforms, although economic experts say that the reforms proved to be highly effective.
After the economic crisis
In the aftermath of the late 2000s global economic crisis, Russia's state budget went into deficit for the first time in years. Kudrin has said that the projected budget deficit is to total 3.6% in 2011, 3.1% in 2012 and 2.9% in 2013. The deficit will be covered primarily through expanded market borrowing. Russia conducted its first international debt sale since 1998 in April 2010, raising $5.5bn on the international markets. According to Kudrin, the government's aim is to attain a deficit-free budget by 2015, based on projected $75–78 oil prices per barrel. Kudrin has said that the Reserve Fund, accumulated before the crisis, will run out in 2011. Consequently, Kudrin warned that Russia will soon have to adjust to being a country, just "like everyone else" and called for a more effective use of state funds.Finance Minister of the Year 2010
In October 2010, Kudrin was declared "Finance Minister of the Year 2010" by the Euromoney magazine. The magazine said that "Kudrin is rightly hailed as a fiscal manager of the highest order" and praised his "championing of the free market and fiscal prudence". According to Euromoney, the Stabilization Fund created and supported by Kudrin also "enabled Russia to pay off its foreign debt early", and noted that "Kudrin is rightly praised for his commitment to tax and budget reform, Russia’s desire to join the World Trade Organization (WTO) and continuing the progress in privatization."In the award ceremony, Kudrin said: "Russia has already learnt this lesson; it was able to prepare and pass through this period. In this context, this is a result. And when you see your result, you feel satisfied. And when the result is praised by the professional community, it is especially important."