Russian President Vladimir Putin appointed 34-year-old Deputy Finance Minister Maksim Oreshkin as the head of the Ministry of Economic Development on November 30, following the shock arrest of ex-minister Alexey Ulyukaev on bribery charges.
The appointment of the economist from the finance ministry will undermine the economy ministry's traditional position of opposing fiscal consolidation and austerity and promoting spending and investment.
"The merging of the ideologies is the most important thing that happened," Ulyukaev, who was sacked by Putin on November 15 after allegedly extorting a $2mn bribe, commented to the Rossiya 24 TV Channel about Oreshkin's appointment. He added that "we [the two ministries] won't disagree on the economic development outlooks".
Oreshkin is respected as a solid and experienced economist, and a monetarist supporting budget consolidation and low inflation, unnamed sources in the federal government told Vedomosti daily. Among other things, he promoted the idea of setting a conservative $40/barrel oil price outlook in the 2017-2019 fiscal framework.
His appointment to head the economy ministry could mean that the Kremlin has decided to support the re-installment of the "budget rule" - a set of oil-price based budget guidelines limiting spending that was lifted in 2015 amid the fiscal squeeze on Russia due to low oil prices and Western sanctions.
Most officials surveyed by Vedomosti expect Oreshkin to promote the ideological merging of the finance and the economy ministries, with the latter shifting from lobbying for large infrastructure and systemic projects to forecasting and modeling economic development.
At the same time, some respondents point out that Ulyukaev, an ex-central banker, was himself seen as a monetarist and changed his position on some critical issues after taking the helm of the economy ministry.
Other sources claim that the ambitious economist Oreshkin will not simply copy-paste finance ministry numbers and will strengthen the quality of macro forecasting in the government.
His relative lack of experience vis-a-vis the lobbying community, as well as the finance ministry and the Central Bank of Russia (CBR), as well as the low propensity for reform in the government, are seen as main challenges for the new minister.
Oreshkin started his career in 2002 in the CBR, joining Rosbank in 2006 where he rose to the position of managing director by 2010. From 2010 to 2013 he was the chief analyst for Russia and CIS for Credit Agricole, and then chief economist for VTB Capital investment bank. Since 2013, Oreshkin headed the finance ministry's long-term strategic planning department.
The European Union has agreed to extend the sanctions against Russia for six months, European Council President Donald Tusk announced on June 22. “Agreed. EU will extend economic sanctions ... more
The acquisition of India's Essar Oil led by Russian oil major Rosneft can be “considered done”, the state-controlled company’s CEO Igor Sechin said at the annual shareholder meeting on June 22, ... more