Already a Bloomberg.com user?
Sign in with the same account.
Savvy international investors know that in the past two years the government of Vladimir V. Putin has been pushing a sweeping package of measures that aims to kick-start Russia's economy -- by cutting taxes, slashing bureaucracy, and injecting competition into moribund industries. And they know about Russia's new 13% flat tax, which has proved surprisingly effective in raising revenue for the government.
But investors may not know the man most responsible for Russia's fiscal overhaul. That honor goes to Arkady V. Dvorkovich, 31, a deputy minister in Russia's Ministry for Economic Development & Trade (known as the economy ministry). An economist with a master's degree from Duke University as well as Moscow's New Economic School, Dvorkovich earned his stripes by serving as personal adviser to German O. Gref, the Economy Minister, in 2000-01, helping him to craft President Putin's reform program. An expert in public finance, he still oversees tax issues as deputy minister under Gref. In that role, Dvorkovich wants to trim payroll taxes to 30% from the current 35.6%, abolish the 5% sales tax, and slash the value-added tax to 16% from 20%.
But his brief extends well beyond taxes. Fluent in English, Dvorkovich has become one of Russia's most prominent international voices on economic policy. Thanks in large part to his influence, the economy ministry has replaced the finance ministry as the driver of economic reform. Dvorkovich is sure to play a big role as Russia tackles the next batch of reforms, including overhauls of the banking and pension systems. "He's one of the best young technocrats in Russia," says Roland Nash, head of research at Moscow investment bank Renaissance Capital.
Dvorkovich has been serving the Russian government since 1994, when he landed a job at Moscow's Economic Expert Group, a think tank that advises the finance ministry. There, he so impressed Russia's economic policymaking Establishment that he was promoted to director in 1997.
Of course, the Moscow native could have made a lot more money in investment banking -- and friends predict he'll eventually join the private sector. But for now, he's having too much fun in government. He recently slammed his superiors in the Cabinet for watering down a plan to cut the bureaucracy. President Putin then echoed the same criticisms in a state-of-the-nation address. Dvorkovich's reformist ideas are clearly getting through to the Kremlin.