The odds were against Maxim Oreshkin. With only three years of government experience when President Vladimir Putin picked him to lead Russia’s economy ministry late in 2016, Oreshkin was considered a political lightweight. He got a ministry at risk of being taken over by the more powerful finance ministry, and his predecessor was under house arrest on charges of accepting a $2mn bribe.
But months later, the former economist at Societe Generale’s Russian unit and VTB Capital has emerged as a Putin favourite, according to three officials familiar with the president’s thinking. Oreshkin has joined Putin at major international events with a bigger role than previous economy ministers had.
He even briefly stole the limelight at this summer’s Group of 20 summit in Hamburg, revealing details of the Russian president’s first encounter there with his US counterpart, Donald Trump.
Oreshkin, 35, is overhauling the successor ministry of Gosplan, the Soviet agency that planned the command economy, relocating to a high-rise office building and hiring alumni of investment banks and international consulting firms. What remains to be seen is whether he can convince his notoriously cautious patron to undertake the reforms needed to jump-start economic growth.
“We are building the ministry of the future,” Oreshkin said by text message. “A key task is to attract strong personalities and create the environment for them to develop.”
In the revamp, Oreshkin is creating an informal group known as the “office of changes,” to improve the structure of the ministry and the way it operates. It’s populated with recent prize hires – Ekaterina Vlasova, poached from Citigroup, PricewaterhouseCoopers’ Zoya Viktorova and Yulia Urozhaeva from McKinsey & Co – and will have direct access to him, according to two other officials.
He declined to comment on whether he’s favoured by Putin. Kremlin spokesman Dmitry Peskov didn’t respond to a request for comment.
“Market participants recognise Oreshkin’s authority, even though he’s young,” said Oleg Kouzmin, chief economist for Russia at Renaissance Capital in Moscow. “They are glad to see new faces, because they can carry out new ideas.”
The question for Putin, who’s widely expected to seek another six-year term in 2018, is how to revive Russia’s fortunes after its longest recession this century gutted household finances and plunged millions into poverty.
A rebound this year has already put the economy at the limit of what the central bank believes it can achieve without difficult structural changes. Two of Oreshkin’s predecessors in the job, Bank of Russia Governor Elvira Nabiullina and Sberbank chief executive officer Herman Gref, fell short in their efforts to loosen the state’s grip on business.
Still, Oreshkin said the answer is to revamp government spending, “completely excluding bureaucrats from making specific investment decisions.”
He seeks to unlock investment in a country besieged by sanctions and hamstrung by weak institutions and a poor business climate.
The goal is to eliminate “systemic constraints” on funding, he said. In an economy that’s become increasingly dominated by the state under Putin, that is likely to be a tall order.
“Oreshkin knows what to do, but in order to please Putin, there’s a chance he won’t hold the line on economic reforms,” Yevgeny Yasin, an economy minister in the mid-1990s and one of the driving forces behind Russia’s transition from communism to capitalism.
With presidential elections approaching, Oreshkin is drafting an official set of reform proposals for the government, a prominent role that puts him in competition with alternative plans being prepared by former Finance Minister Alexei Kudrin and the Kremlin’s business ombudsman, Boris Titov.
Oreshkin’s also speaking out and expanding his role. Less than a month after he criticised official economic data, the government shifted control over the Federal Statistics Service from the cabinet back to the economy ministry. Now a separate department inside the ministry, staffed with about 30 people, is overseeing the agency known as Rosstat, with the goal of adopting international practice to provide a better snapshot of the economy, according to one of the officials.
Last month, Putin also named Oreshkin to replace finance minister Anton Siluanov as Russia’s representative at The World Bank Group’s agencies. Even his presence at the G-20 meeting shows he’s unafraid to elbow his way in: Oreshkin himself asked the president to join the delegation, according to two of the officials. The minister declined to comment on that.
His most recent initiative is to get his ministry a leading role in overseeing the development of the “digital economy,” an area that Putin has singled out as crucial to Russia’s future.
For Oreshkin, the job could be a springboard, according to Yasin, who’s currently an academic adviser at the Higher School of Economics in Moscow, the young minister’s alma mater.
“He can become prime minister at some point in the future,” Yasin said. “He’s still very young.”
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