Russian policy veteran Kudrin urges seizing of the COVID moment for visionary reform

Russian policy veteran Kudrin urges seizing of the COVID moment for visionary reform
Alexei Kudrin
By bne IntelliNews May 26, 2020

The head of Russia's Audit Chamber and veteran policymaker Alexei Kudrin published an oped in Kommersant daily, in which he laid out his vision of the state anti-crisis policy amid the coronavirus (COVID-19) epidemic.

Ex-finance minister Kudrin has been largely credited for navigating Russia through the 2008 crisis and accumulating the fiscal and external reserves that make up the backbone of its sovereign investment case.

For the past years Kudrin's return to the government was widely anticipated, with rumours of him being groomed for prime minister in 2013 and for presidential administration in 2018. However, he remained in an advisory role as the head of the Audit Chamber.

On May 25 Kudrin urged combining the "tactical" anti-crisis support of tackling crisis symptoms with a "visionary" approach that would aim for long-term sustainable improvement in such areas as healthcare and life expectancy, income growth, innovative economy and adequate state institutions.

Kudrin notes that the Russian and global policymaking debate is currently split between these two dimensions, fighting the effects of the pandemic and speculating on a post-pandemic world, with propositions bridging these two types of reactions.  

The ex-minister also questioned the shape of future globalisation and international trade, as well as military spending and interventionist foreign affairs policies. He was sacked from the government in 2012 for openly challenging the rising military spending.

He also outlined another three domains of inquiry: economic policy (state versus private sector in Russia, regulation, demographics, and innovative governance, healthcare and education, hydrocarbon dependency); regional development (federal centre versus regional governance, urban agglomeration); and social policies (data management, privacy, social institutions).

Kudrin reminded that the critical year 2024 (the target year for National Projects and the supposed re-election year for President Vladimir Putin) is less than 4 years away and urges the adjustment of state strategic goals around well-defined axes.

Those axes are defined by truism that was undeniably revealed by the pandemic, Kudrin believes, noting four unconditional goals:

we all want to be healthy and live long

we all want not to be poor and see our incomes rise

we need a growing innovative economy, including digitally

we need state governance and institutions that adequately meets the challenges of our time

Kudrin reminded that he had previously warned that a window of opportunity for structural reforms was open for only two years in 2018, but believes that the coronavirus has brought forward new challenges that will push for tackling unresolved issues.

The current National Projects strategic development programme is loosely based on the so-called Plan K which was written by Kudrin at the Centre for Strategic Research (CSR) think-tank, although he himself has criticised the National Projects as "mostly numbers and indicators dancing". 

Kudrin has also repeatedly warned of unforeseen technological and ecological challenges in the Russian economy. He previously estimated that the best-case scenario for Russia in 2020 is a 3-5% GDP contraction that would require more than 5% of GDP state support. In the worst-case scenario Russia could see an economic drop of 8%, the same as in 2009.