COMMENT: New Russian government unveiled

By bne IntelliNews May 22, 2012

Alexey Zabotkin of VTB -

Russian President Vladimir Putin on May 21 presented the list of members of the new cabinet. 18 of the 29 appointments announced are new arrivals to ministerial positions. Of these, 14 worked in other positions within the federal government or the President's staff and 4 come from the regional executive branches.

Economic

No major surprises. The line-up of the economic bloc is very much in line with the preliminary indications over recent days. Policymaking is to be spearheaded by First Deputy PM Igor Shuvalov (public finance, privatisation, housing) and Deputy PM Arkady Dvorkovich (industries, including energy, and agriculture), with Dmitry Rogozin remaining Deputy PM in charge of the military-industrial complex. Elsewhere, as mentioned by Vedomosti , the Ministry of Energy is to be led by Alexander Novak; he was previously a Deputy Finance Minister, and the introduction of an industry outsider might be seen as a sign that the government does indeed intend to focus on streamlining the governance of state-controlled entities in both the oil/gas and electric utilities sectors.

National security and law enforcement

Both the Foreign Minister and the Defence Minister retain their jobs. The New Minister of the Interior (MVD) is Vladimir Kolokoltsev, who has been the Moscow City police chief since 2009. This might be seen as an indication that there is still a cautious approach to reshaping the much criticised police force.

Watch appointments to the Kremlin staff and at the state-owned companies In order to complete the policymaking landscape, one also needs to watch the appointments to the President's staff; some of the key players from the outgoing government might move here. An equally - or even more - important signal for the stock market is the changes (if any) at the helm of state-owned companies.

Otherwise, the details of the policy initiatives from the new government, which are to crystallize in the next two-three months, will provide grounds for a more nuanced assessment of today's personnel decisions.

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