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Russia: New Economics Adviser Plays Down His Influence

Russia's President-elect Vladimir Putin made his first important economic appointment yesterday, choosing a reform-minded economist as his economics adviser. RFE/RL correspondent Sophie Lambroschini reports from Moscow that Andrei Illarionov is certainly a reformer, but that doesn't mean his views will prevail.

Moscow, 13 April 2000 (RFE/RL) -- The appointment of Andrei Illarionov as presidential economic adviser is the first sign that President-elect Vladimir Putin's pro-reform pledges may be sincere.

Illarionov's credentials as a reformer are so solid that Russian commentators usually refer to him as a "radical reformist." He says that label is incorrect. His free-market convictions, he says, would be considered normal and moderate everywhere but in Russia.

In Illarionov's view, Western development models failed in Russia and resulted in the rise of the oligarchs because Russia was not ready for them. Many of Russia's current economic indicators, he says, put it near the level of Zambia or Mexico of the 1960s.

Illarionov says that the most important thing for Russia is to find the right level of state intervention. He says the current state role is too great and must be reduced, but not abandoned.

The 38-year-old economist has only two years of political experience. He began his political career in 1992 as an economic analyst in Russia's first reformist government, under shock-therapy proponent Yegor Gaidar. There he worked as a strategist until 1994, when Viktor Chernomyrdin was prime minister. Illarionov left his post as adviser, accusing Chernomyrdin of attempting "an economic coup" by backtracking on the reforms Gaidar had initiated.

After Illarionov left his brief stint in government, he headed an economics think-tank (the Institute for Economic Analysis) until last fall, when he became one of the main analysts at the Center for Strategic Planning. That is the influential think-tank set up by Putin to craft a new economic policy.

Illarionov is best known for predicting the August 1998 ruble crash. During that summer, he had pleaded unsuccessfully with the government of Sergei Kirienko to forestall the crash by a controlled devaluation of the ruble.

Whether his advice will be better heeded in his new post is an open question. Illarionov himself admits that his appointment does not mean that his opinions will always be followed.

Carnegie Fund analyst Nikolai Petrov points out that the position of adviser doesn't hold any specific powers. He says the influence of the post depends on the president.

"[This post] is not clearly integrated in the state structure. Today, the attitude towards him is such that he can be the representative of the Center for Strategic Planning which is now following the decisions [of the government] and advises the president in some ways. But it may happen that tomorrow no one will listen to him." In an interview with a Russian daily ("Vedomosti"), Illarionov was careful to dampen any over enthusiastic interpretation of his appointment. Asked whether his appointment meant that Putin was set on taking radical steps on the economy, Illarionov answered that only the composition of the new government will reveal that.