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Anton Siluanov: “...It's worth any price you pay”

Логотип TASS TASS 26.06.2017 TASS

On debts, greed, distribution of subsidies, relations with Chechnya’s Kadyrov and privatization

— Do you lend to others?

The Ministry of Finance is in charge of the government’s debt policies. So it does lend and then demands the money back. This is our ministry’s immediate duty.

— I see, I see. What about you personally? Do you lend to friends to help them make ends meet before payday?

I do if I am asked to. Surely. With no interest charged. It goes without saying…

Honestly, I’ve had different experiences of the sort, though. Negative experiences, too. Some borrowed from me without ever paying back. The last time such a thing happened was a long time ago, say twenty years or so. Some friends asked me to help start up a new business. They even invited me to join them as a partner. But then… I’ve never got my money back.

— A hefty sum was it?

In those days, yes. The loss was a substantial one.

But you know, you should take a philosopher’s attitude towards such troubles. I see no reason why I should regret a loss when there is no chance to recover it. It’s far better to earn more and to be more prudent in the future.

And still, I do lend as before. To people I trust.

— Have you ever had to borrow yourself?

Yes, of course. In my younger days. I turned to my friends for help when I was about to buy my first place of residence. I wanted to start living separately from my parents, so I had to devise a long chain of property exchange deals. The problem of housing is a very acute one for many young people. Those who wish to start living a life of their own… People lent me money without any interest. And my mindset will not let me rest at night until the day I pay back the debt down to the last dime. I repaid all my debts as soon as the chance became available.

— Do you remember the first ruble you earned?

Back in my school years I tried to earn pocket money at the local post office. I had to deliver newspapers and magazines to subscribers’ mailboxes in my neighborhood. It turned out to be too hard. I had to get up too early. And in my student years some guys, including myself, went to shovel snow from the rooftops of the three railway stations in Moscow’s Komsomolskaya Square.

After my first year at the Institute of Finance, I worked for two months at a construction site together with other fellow students. I earned 47 rubles, 48 at the most. I’d long dreamed of buying a good tape-recorder with loudspeakers, but the money was far from enough. So I bought another valuable and useful thing. A wrist watch. A very good buy it was. I don’t remember the maker, but the quartz watch was a big one.

— Does being minister of finance mean you have to be a stingy individual?

A rational spender, I should say. This description is more accurate.

I do know that some regard this as a manifestation of stinginess or even greed, but it is the Finance Ministry’s job to take care of government moneys. It is always essential to determine if the spending requested by fellow government ministers is really necessary, or if it is possible to use extra-budgetary sources and to overhaul their own ministries’ budgets. The Finance Ministry’s staff is obliged to have in-depth knowledge of the economic branches concerned. Sometimes even better knowledge than the respective ministries.

Each petitioner who files an application suspects that the Ministry of Finance tends to underfund its needs to a greater extent than everybody else’s. In the meantime, we have to take care of the overall budget money and to bear in mind the real capabilities of the treasury.

— OK, but what happens if those whose requests you’ve failed to meet try to obtain direct support from the country’s No. 1 official?

True, government ministers and heads of Russia’s constituent territories often go to the President in attempts to obtain financing for this or that program or project.

There is nothing wrong with that, but it is important to understand how realistic their requests are. The Finance Ministry has long devised a certain tactic of how to go about this business. When too many requests of this sort pile up and it becomes clear the budget cannot meet them all, then real professionalism has to be displayed. Some things can be postponed, and others, cannot. We notify the superiors, brief them on the details, present our own proposals, hear recommendations and advice and eventually achieve the best solution.

In reality, the treasury does have the money. Priorities are to be identified properly. The Ministry of Finance is interested more than any other body of power in tapping latent resources, to devise structural measures that would help not only to cut costs, but also encourage economic growth and labor productivity in the public sector.

Sadly, far from all agree with that.

— Some display their discontent and criticism in public. For instance, the head of the Chechen Republic last autumn criticized your agency for an attempt to slash the republic’s budget.

I like Ramzan Kadyrov as a person. We have a friendly, even comradely relationship. I know that he touched upon that subject not because he is a nuisance or because he wished to start a quarrel. He knows well enough that we calculate Chechnya’s budget in a very straightforward manner.

— What manner is that?

Unlike other regions Chechnya has its financial assistance calculated on the basis of actual spending. First we take a look at how unbiased and authentic the figures are. Then we check the region’s income base and provide extra financing to fill the gap. We’d agreed that we would be reducing that part of assistance every year. In 2017 we pushed ahead with the optimization of spending. Chechnya had its subsidies reduced proportionately to the cuts applied to all other territories of Russia. This is what Chechnya’s leader criticized us for. He interpreted that as injustice in relation to his republic. Later I had a meeting with Kadyrov and we managed to achieve a mutually acceptable solution.

— To whose benefit?

To our common benefit. We share a common goal. Chechnya was given extra assistance, but not as much as Grozny had originally hoped for. That was done bearing in mind the real capabilities of Russia’s budget.

The rule is simple. The less money there is in the treasury, the better the creative potential is tapped. You begin to give thought to where the money can be found. And some very reasonable options come to mind and fit in with the funds available. Anybody will easily succeed there where money pours like the rain falls. The real trick is to cope with the tasks when the resources are scarce!

— At the end of May 2017 President Vladimir Putin met with animated cartoon makers and promised extra funding of half a billion rubles ($8.4 million). And along with his promise he offered some good advice: if the Ministry of Finance rises up in revolt, make a funny cartoon about it. What character’s role would you like to be featured in it?

Let’s wait till the cartoon hits the big screen! I’m joking, of course. Certainly, we will do what we can, once the head of state made such a decision. We’ll find the resources.

As far as global plans are concerned, we, Finance Ministry people hope that budget spending should not increase until 2020 (2019 included). Even in nominal terms. You have to keep in mind, though, that there are certain budget items that cannot be cut by any means. Such as inflation-adjusted public sector wages, retirement pensions, grants and fringe benefits and so on and so forth. A third of our budget is spent on law enforcement and defense – the current costs and purchases of military equipment and armaments. The defense industry’s expectations have been climbing. Investment in the military-industrial complex yields no added value, because a tank is not a farm tractor. It will not be ploughing or sowing, and consequently contributing to the GDP. On the other hand, the nation’s defenses have to be strengthened. Decisions to be made in this field must be properly weighed.

— According to the Finance Ministry’s estimates, the newly-extended rearmament program until 2020 has to fit into the 14-trillion ruble ($234 billion) allotment. The Defense Ministry had asked for 20 trillion ($335 billion). Whose arithmetic is better?

We will be able to see that after some time, when we make it clear the amount of resources actually available. In any case, we should proceed from the realities and remember that economic security is no less important than military security.

The coming three years will not be easy ones. At this point we foresee the first increases in the budget’s incomes will be in 2020. Then we will be able to afford more.

— At whose expense?

The economy’s overall growth remains first and foremost. We are to ease the imbalance that developed due to the slump in budget incomes amid an unfavorable environment in foreign markets and the sanctions taken against our country. The spending obligations accrued in the previous years, when the country was selling its oil for $100 per barrel are really large ones. Now the budget deficit has to be reduced, because it is financed with our reserves. The thrift box is not bottomless. We cannot afford to spend it all and have nothing left for a rainy day. The risks are too high. The assumed commitments inside the country are not the only thing I’m talking about. Foreign investors keep a close eye on the situation. They evaluate likely scenarios, too. Will the government raise taxes and at whose expense will it be honoring its obligations?

Our prime task is to balance the budget. We comprehend a balanced budget as one where incomes are equal to spending minus the interest on loans. In other words, the budget deficit is to constitute about 0.8% of the GDP. This poses no risks – economic, social or political. We can refinance such a deficit without tapping government reserves, to service it with further borrowings, without resorting to massive privatization transactions like those we saw in 2016.

— Do you think that privatization of any major government-owned assets will not be on the agenda for years to come?

Privatization is always on the agenda. But there are strategic companies, including those producing raw materials. As a rule, we have reached the limit on all of them. Stepping beyond that limit would mean the government losing the asset. That is a matter of national security. This explains why no major deals, like last year’s sale of stakes in (the oil) companies, Rosneft and Bashneft, are set for the foreseeable future. As a matter of fact, we have been working hard to implement a policy that would make such deals unnecessary. It goes without saying that privatization has strong arguments in its favor: not just the cash revenues the federal budget will get, but also the reduction of the government’s stake in the economy and the attraction of private investors into the development of government-run companies. This is always a major incentive for mobilization and more effective performance.

On reforms, pensions and the base and superstructure theory

— The tax reform has been put off until after the 2018 presidential election. But discussions should have begun by now. For the time being, only the idea of raising the VAT to 22% and reducing insurance deductions accordingly has been outlined quite clearly.

Nothing has been stated clearly enough yet. The government is considering various options. I’ve explained my position. The underground economy remains large. Many businesses are reluctant to pay wages “on the books”, because nearly a third of their wage spending is subtracted in the form of insurance deductions. It is far easier to turn bank money into cash (although this is a costly issue, too) and to distribute it among the employees under the table (entirely or partially). The closer we bring the level of surcharges on wages to the level of the underground economy, the more incentives companies will have to quit the semi-criminal zone and to work openly. Pay your taxes and have a good night’s sleep, the saying goes.

That’s the real meaning of the tax swap. It will have no effect on the budget, because our proposal is for proportionately increasing indirect taxes that are better collected. The underground economy cannot skip the VAT, since that tax is everywhere and will have to be paid anyway. A hike in it will have many pros. For instance, it is an incentive for exporters, because they will have the VAT reimbursed and labor costs reduced. The effects on inflation and the problem of keeping the Pension Fund in balance are on the negative side.

Let me say once again – these are just proposals being discussed by the government. Specific parameters may be adjusted either way, but the logic is clear: taxes on labor are to ease and taxes on consumption to go up.

We are to have a clear understanding of the tax reform. Above all we see it as an economic incentive. Achieving higher economic growth rates is the key task. Not below the global ones. The IMF predicts the world economy in 2017 will grow by 3.6%. We should be no worse. Let me say once again: the Ministry of Finance is for spending cuts. This is the optimal way. Otherwise bigger debts will be inevitable. Borrowing will have to be made on the domestic market. Major loans will push rates up and unnecessary tensions will ensue. We can easily borrow these days, because the lenders know that our debt is small, our fiscal policies are clear and predictable, and that we are cutting the budget deficit. But if the government’s policies on the market are no longer clear and sensible, no lender will be eager to put money at risk. Particularly so at a time when the reserves may run dry.

Just recently I met with my Belarusian counterparts. They hope to take out foreign loans, but it has already turned out to be a real problem. And the price of borrowings is estimated at 7-8%. We obtain foreign loans at 3.5%, 4% at the most. This indicates that the market has a different attitude to the economic situation and the authorities’ actions. It also explains why the proposals are so different. In fact, this gap demonstrates the degree of confidence in the government’s policy in the field of finance. Losing credibility is very easy but regaining it is tremendously hard. There must be predictability, consistency and stability. And that goes for the national currency and for the economy.

— But we know well enough that the political superstructure often governs the economic base. Elections follow in quick succession…

It is true, but the system should not be thrown off balance. Clearly, there are certain mandatory, public obligations that have to be honored by all means and must undergo inflation-adjustment. True, during electoral cycles, paramount caution is essential, but reforms cannot be postponed indefinitely, because they are eventually going to benefit the public. In 2016, we took a firm attitude to adjusting wages and social benefits to inflation. We set a four-percent cap on the growth of pensions. That was done to avoid fueling inflation, which harms incomes and savings. It was an unpopular decision but economically a well-considered and precise one. In the end the economy in the last three months of 2016 and the first quarter of this year showed signs of growth. We estimate it at 1%-1.5% in annual terms. What does that mean? Economic growth will bring about a rise in people’s incomes and more revenue to the state coffers. We have not spent significant reserves, contrary to what happened during the 2008-2009 financial crisis, when more than six percent of the GDP had to be used.

This time we said honestly: our capabilities are as they are, and no spare resources are at hand. Let us proceed from these realities.

True, at a certain point the economy took a slide but it did not collapse. Now it has begun to rise again. Had we tried to address the emerging problems with cash, the exit from the crisis would have lasted much longer. Sometimes it is far better to employ some belt-tightening to achieve growth in the end.

— You have long talked about the need for raising the retirement age. A final decision has been put on hold for now, although it is clear to everybody that this will have to be tackled in the end…

That’s a tricky question… The answer to it has to be linked with another one: will this measure give our retirees higher pensions and better health care? 

— Everybody is eager to have a better pension and medical treatment, of course.

That’s my point! But where will the money come from? The pension system is off-balance and depends entirely on subsidies from the federal budget. Besides, we are in a demographic hole and it will take us a while to get out of it. The economically-active population has been falling by approximately 800,000 a year. This trend cannot be changed in the medium term. How can one expect the economy to grow at a time when labor resources are shrinking?

Now, there is a purely subjective factor. The longer people stay employed, the stronger they feel they are useful, important and in great demand. This is a means against aging. Literally. Examples are everywhere in sight. No active person will agree to sit idle in front of the TV or in the company of other retirees on a public park bench.

It would be very wrong to set artificial timeframes. Who would dare say that a 55-year-old or a 60-year-old is an elderly person? Who dare would say this is an age of dementia?

The demographic situation forces us to look for labor reserves. The budget resources that are spent on the Pension Fund could have been used far better, first and foremost, to provide better services to retirees. But let me repeat that this is a very delicate topic and requires well-considered decisions.

Obviously, the Pension Fund must achieve a balanced, self-sufficient format. This is the reason why the Ministry of Finance interacts tightly with the social segment of the Cabinet of Ministers to explain the positive aspects of the proposed changes.

— Do your colleagues turn a deaf ear to what you are telling them?

Their wish to keep the current state of affairs unchanged is natural. Some even speculate the rate of deductions from the wage fund should be raised from 30% to 34%, precisely as the law requires. Currently a freeze is in effect and it will last until 2019. But I believe that deep down in their hearts they are well aware that getting back to the 34%-rate under the current situation is impossible, that this option is not feasible and that other means of achieving a balance will have to be looked for.

— And what are you going to do about the ruble? Economic Development Minister Maksim Oreshkin and you have repeatedly taken turns in verbal attempts to push it down, but for a long time it held firm and refused to sink.

In fact, we did nothing to push it any direction. What I’m going to say is different. Neither the Central Bank, nor the government, nor the people – nobody is interested in seeing the national currency sway to and fro. This is the worst scenario that leaves no chance to forecast anything. We need a stable ruble in the medium term and our task is to achieve that in various ways, including budget measures, as well as monetary and credit policies, to ensure that any oscillations should be predictable and not too volatile.

As you have remarked quite correctly, verbal interventions have to be used to explain the situation. The ruble strengthened on a heavy influx of capital, including foreign capital. Foreign investors saw they could make good money in Russia. The annual yield on our ruble-denominated securities are as high as 8%. Besides, the ruble’s rate firmed. Profiteers came here to skim the cream off and leave. That put pressures on the ruble. We all could see that well enough and tried to explain that such a firm exchange rate could not last for fundamental reasons. It could plummet any moment. What if that happens tomorrow, who will be held responsible then? Obviously, those who are in charge of government finances. So we try to smooth out the ups and downs in various ways, including the purchase of currency to replenish forex reserves. And the Central Bank systematically lowers the interest rate, thus moderating the excessively strong exchange rate.

— The Finance Ministry’s latest placement of $3 billion worth of Eurobonds amid US threats to impose more sanctions – what was it? An attempt to take a precaution? To create a safety net for the rainy day?

Sanctions or no sanctions, we still have our own business to push ahead with. Incidentally, the political threats by no means dissuaded foreign investors, including US ones, from buying our securities. This time the demand for our Eurobonds was twice the initial supply. Foreign investors accounted for 85% of the buys. It was a very successful placement.

It is important to realize, though, that this borrowing is not the main source of funding the Russian budget’s deficit. And most certainly not an attempt to create a safety net. Under the program for domestic public borrowing this year the amount to be drawn is approximately ten times greater. We turned to foreign investors with a reminder of our presence on the foreign market so as not to lose contact with them.

On foreign currency, motorbikes, space career ambitions, ice hockey and the KGB

— Do you buy foreign cash yourself? For household needs?

I don’t feel any special need to do that. I seldom travel abroad. The daily allowance I’m entitled to when I go on business is quite enough as pocket money. And I spent all of my vacations in Russia in recent years. Especially I like going to Sochi in wintertime. Krasnaya Polyana is an excellent European-style Alpine skiing resort. Roza Khutor is particularly impressive. The long lines to the ski lifts is possibly the only thing I don’t like there. At least that’s what I saw during my latest trips there during the New Year holidays and the investment forum in February.

— Did you have to waste too much time standing in line?

I used the services of a professional instructor, thus getting instant access. It’s been a long time since I started skiing. At least twenty years.

— What do you need an instructor for then?

For me to try out new courses and to see new places. It’s better to do that in the company of a professional. Besides, I went there with my son, Gleb. He changed skiing for snowboarding just recently and needed advice.

— And your son and you also ride motorbikes together?

Gleb rides to university and back home even in the wintertime. I prefer to wait till spring. This year I opened the season in the second half of March.

— Are you a roadhog?

I’m a law-abiding driver by and large, but I do feel like giving my motorbike full throttle from time to time. Otherwise what sense does it make to ride a motorbike? It lets you enjoy the speed.

— Was it Energy Minister Alexander Novak who is behind this hobby of yours?

Yes, a colleague and a friend of mine. It was when we both were Alexey Kudrin’s deputies. Alexander had already had an impressive biking record and he persuaded me to join in. I must thank him for that. Motorbiking is an addiction. On Saturdays I usually bike to the country home in Ilyinka, near Moscow.

This summer I hope to make a trip to the south accompanied by my friends.

— Will you go to Crimea?

Very probably. The scenery and climate there are wonderful. On one occasion we biked some 2,000 kilometers from Moscow to Foros in just two days. Crimea is not the only place we like to visit. Three years ago we went on a motor trip about the North Caucasus. In Chechnya, we spent two days. Ramzan Kadyrov was hour host. He likes biking himself. We went to the mountains together and traveled about the republic. It is a quite remarkable area from the standpoint of development. I’ve been to Chechnya on business many times and I have been able to see for myself the changes for the better. Grozny has turned into a modern and very beautiful city virtually in no time.

Incidentally, Crimea, too, has seen more changes for the better over the past three years than occurred there in the previous twenty. I’m looking forward to the day when the bridge across the Kerch Strait opens to traffic. When it does, all those piles of problems hindering trips to Crimea will disappear.

— Is the estimated cost of building the bridge – 227 billion rubles (3.8 billion) – also the final price tag?

You know, this is precisely the occasion for us to say with certainty “It’s worth any price you pay.”

— It’s really amazing to hear a minister of finance say things like that.

Originally the project was estimated at 50-60 billion rubles ($1 billion), but it looked far more moderate at the beginning. According to the current plans passenger traffic will grow to about 17 million a year and cargo traffic, at 26 million tonnes.

No such projects have been built in Russia ever before. Naturally, it cannot but be supported. True, some inner resources have to be tapped and costs optimized and lowered, but that is a natural process. In fact, it is the chief mission of the Ministry of Finance to address such issues. Incidentally, even in the “affluent years,” when there was no shortage of funds in the budget, we still had to address similar tasks. Oddly enough, there were far more requests then. Nobody felt obliged to curb one’s own ambitions. You may remember that the task of budget balancing was always the issue of the day first at a price of 20 dpb, then 30 dpb, then 40 dpb and 50 dpb. At a certain point the price climbed to above 100 dpb. Yet the money was not enough.

— Incidentally, had we known beforehand in 2008 what would have happened to the ruble and the price of oil, would we have dared to host a World Football Cup?

But we hadn’t, had we? Whatever the case, the bulk of the costs have been funded by now. The finishing touches are being put. Now we should develop the understanding of how to effectively use the facilities being built. The stadiums in the first place. The Olympic heritage in Sochi has been put to proper use. Now the same solution will have to be found for the football stadiums. In particular, in those regions where there are no classy teams. That’s a problem. The stadiums’ maintenance costs will be a heavy burden on the regional budgets. Clearly, fans in Moscow, St. Petersburg and Kazan will be filling the stadiums. The facilities can be also used to host not only sports events, but also a variety of concerts and shows. But what will the eight other cities do? We should think about this, preferably now.

But it should in no way affect the great football event our country is to host a year from now, something Russian fans of the world’s most popular sport have been dreaming about.

— Are you a fan?

A very calm one, I’d say. As a teenager, I took up track and field athletics at the central sports army club CSKA. I’ve been sympathetic towards this sports club since. Honestly, I like ice hockey far more than football. I go to ice hockey matches sometimes. Not very often though. Sometimes, when you watch the game from the stands, the announcer would turn the mic on to read out the names of the guests in the VIP box. As a rule, the audience responds favorably upon hearing the names of various senior officials, but the crowd’s mood instantly changes for the worse and people start booing as soon as the finance minister’s name is mentioned. It might seem that the minister of finance has stripped each fan present of something very precious! The public at large has a habitual grudge against us, bankers. Take it or leave it!

— You must’ve picked the wrong profession. You were born on April 12, weren’t you? For some reason I’ve always thought that those born on the day when the Soviet Union put the first man in space cannot but dream of the cosmos and space flights. And definitely not about finance.

My father was a cadet at a flight training academy but had to quit for health reasons. One day he made an awkward landing after a parachute jump and suffered a leg injury. Period. Eventually, he became a financier. When a boy I’d dreamed of becoming a pilot, too. I did not get even as far as parachute jumping, though. Right after school I was admitted to the Institute of Finance.

— Now you are the dean of the Department of Finance and Economics there.

That’s a gross exaggeration. Being a government minister and a full-time dean at the same time is hardly possible. I rather oversee the academic process and meet with students. These meetings cannot be even called lectures. They are rather round-table conferences.

— And one of you grandfathers was a financier, too, correct?

Yes, my grandfather on my father’s side worked at the Soviet Union’s main planning think-tank, Gosplan. And the other one, on my mother’s side worked at the Serp-i-Molot (Sickle and Hammer) metal plant.

— So your parents and you worked under the same roof for some time, right?

We did. My mother still works there and my father left the Ministry of Finance in 1996. He was deputy chief of the department of credit and cash circulation, while I was deputy chief of the budget department. In 1985, when I graduated from the institute my father worked at the Soviet Union’s Ministry of Finance on Ilyinka Street. I was offered a position at the Ministry of Finance of the Russian Federation on Neglinnaya Street. Now it’s the building of the Federal Tax Service.

My first salary was 130 rubles a month. Not very much. At the USSR’s Ministry of Finance I would’ve been paid more. But in principle it was enough. I even managed to save 10-15 rubles a month. I lived with my parents then.

Eighteen months later I was drafted into the army as a commissioned officer. A lieutenant’s cash allowance was far bigger: 250 rubles. A tangible surplus it was!

— You military service was in the KGB forces. Am I right?

Quite right. But I remained a banker. I calculated and handed out cash allowances to the officers and enlisted men. I also gained great experience and made many friends. Some of them, including myself, still get together once in a while.

It was possible for me to go ahead with a military career but I preferred the civil service. I returned to the Ministry of Finance, a newly-created division responsible for cooperatives, leasing and market economy relations. Bella Zlatkis was its chief. I found the job rather interesting and I never regretted I left the military service, although I was earning far less again. In the civil service I felt far more freedom than in the army.

I have nothing to complain about. At the Finance Ministry I held different positions and gained first-hand in-depth knowledge of how the ministry works and how decisions are made. I still find this very helpful.

— Have you ever been invited to try something else?

In the 1990s, I was offered jobs at various banks many times and was offered good pay. But you know, the Ministry of Finance has its own great advantages: the importance of tasks, the scale of problems to be addressed and decades-old traditions. I was very fortunate to have the colleagues I chanced to work with and to have superiors who taught me a great deal. Bella Zlatkis and the chief of the budget department Vladimir Petrov. Sergey Ignatiev was my boss for some time. Later, he led the Bank of Russia. We still keep in touch and talk shop.

— At the April 2017 meeting of the Finance Ministry’s board the chief of the Accounts Chamber, Tatyana Golikova, criticized you regardless of your previous teamwork.

It’s her job to expose flaws and openly discuss them. It would’ve been strange if she did otherwise. But we understand each other well and I’m always prepared to explain why the Ministry of Finance has made any decision and what we are going to do to right any wrongs. Golikova and I have a very good businesslike and friendly rapport.

I feel obliged to say a few words about Alexey Kudrin. It was a great thrill to work with him. I feel great respect for what that man has done for the Ministry of Finance and for Russia’s finance in general. And for me personally. We meet often at the ministry and at different events we both attend. I always turn an attentive ear to his advice and recommendations, because, let may say it again, I have no doubts about his professionalism, decency and sincere wish to help.

— Are you on first-name basis with him?

I always address Kudrin by his first name and middle name and call him “Sir”. It’s always been that way and it’ll always be so. He is my senior colleague.

On foes, deputies-turned-friends, fishing and nicknames

— Do you have any enemies?

I try not to think about that. I always build a normal and businesslike relationship with people. True, some people are far more pleasant to talk to, but you cannot chose. You have to work with all.

— How often do you have to raise your voice?

I may drop a strong word occasionally, there’s no denying that. I can’t help. But not because I really mean it, you may be sure about that. The Finance Ministry has a good team of creative and self-made people. They don’t have to be prodded. Just set a common goal for them to pursue. Moreover, my subordinates are not so much deputies as friends to me.

— Government minister’s deputies-turned-fellows?

Precisely! Of course, true friendship usually takes shape back in school and college days, but my relations with colleagues are those of trust. How can one expect the job to be done well if it were otherwise? There’s no other way of keeping the ministry going and achieving positive results and expected quality.

— Have you replaced many people since Kudrin left?

It’s never been an ultimate end. I believe that any change should add to the ministry’s strength. Fresh remarkable faces have joined the team, but the backbone has remained, of course. Frankly speaking, a government minister’s function is largely a protocol one. I’m always out of office attending some on-site sessions, conferences, forums and round-table meetings… I may pop into my office on Ilyinka Street in the morning for half an hour but never show up at my desk till evening. Moving from one event to another all day. But someone has to take care of the ministry’s current affairs and daily routines. The workload for my deputy Tatyana Nesterenko is great, indeed. Quite an experienced person she is. She took the deputy minister’s position back in 1998. I take my hat off to Tatyana for her support and help.

— Strangely, I don’t see a PC or even a laptop on your desk.

I did have a PC before, but I used it so seldom that I had it taken away because it was redundant. I store all information and all my notes that I need on my iPhone and iPad. I find it more convenient and much faster. But I prefer to read hard copies of all documents. And I do all editing by hand. It’s a habit.

Just one look at an important note you’ve jot down is enough to recall the entire trend of thought and everything else related to it. In that sense the PC is not a living being.

— And one more amazing discovery I made, not here in your office, but earlier, while I was still getting ready for the interview. You’ve never got high marks in math. But isn’t it a finance minister’s duty to count well?

Frankly speaking, higher mathematics is seldom used in everyday work. As far as simple arithmetic is concerned, I cope with it well enough.

— Let’s do some math then. Last year you declared an income of 95 billion rubles. Where did the money come from?

That’s easy. Most of the money I earned by selling properties I’d bought before. I’ve already explained my rational attitude to money. Somebody else’s and my own. When you are young you wish to have all at once: a motorbike, a car, and an apartment… As time flies you begin to take a calmer attitude to the material side of life. I find it far more interesting to spend money on rest and relaxation, on travelling, on what gives you positive emotions.

Three or four years ago I made a great discovery for myself. Underwater fishing. Mind you, not some place on the Red Sea or Cote d’Azur. But rather on the Volga River delta. It’s great. First you put on a special suit that keeps you warm, take a dive and then stay quiet and motionless in the cane thicket. As I’ve discovered fish are very curious beings, just like humans. First, there shows up a reconnaissance squad, mostly small fry. Then bigger species follow. You have to stay motionless on and on until something really worthy, like a five-kilo carp, appears in sight. That’s the right time to put to use your hunting gear, including the speargun.

— And have you ever hunted on the ground?

Just once in the company of friends. We went to a place near Kazan to hunt wild boars. But I realized that shooting another living being is not a hobby of mine. But I like firearms. Back in school I even earned top quality skills at the teenage level in small bore rifle shooting.

I’m very fond of taking my time in the countryside. I have a house in a village in the Kaluga Region.

— What we, Russians, call a summertime dacha cottage?

No, it is a real house in a village. A plot of land some 130 kilometers away from Moscow. Seasonal vacationers from the big city are very few there. And there is a real forest, a river and a wood-burning steambath.

If no business trips or other urgent duties are on the agenda, I get on my motorbike and get there virtually in no time – one and a half hours at the most. And when I get back on Sunday evening I feel rejuvenated, as if I were born again. After a real long vacation. It’s a great way to revive yourself for the start of another working week!

— What else do you do for recreation?

I collect LPs. A friend of mine prompted me the idea. When I visited him at his place once, I could hear myself how wonderful vinyl LPs can sound if played on a good turntable coupled with a valve amplifier. Analogue sound is completely different. It is richer, deeper and more colorful. Digitized soundtracks are very good, no denying that, but I find them somewhat “dry”.

When we were growing up, we played the records on very primitive turntables that we inherited from our parents, or on reel-to-reel tape recorders. Remember the days when everybody was keen to buy ferrochrome tapes. In those days it was just “cool”.

At a certain point, this music hobby faded into the background. Other duties and other interests prevailed. But when I heard the vinyl sound again, I felt overpowered by memories. Every tiny detail looked important: the way you put the LP on the turntable gently holding it by the edges and then lower the tonearm… Believe me or not, but even the smell coming from the warm turntable looked incredibly familiar. I felt I was turning back the pages of time…

As far as I understand, this hobby has become a widely spread one these days. Many people I know begin to use vinyl turntables and even studio quality reel-to-reel tape-recorders. I’m still very far away from this degree of sophistication, of course, but I’ve already bought a good turntable. The whole process is important from beginning to end: take the LP, clear off the dust and put it gently on the disc…

— What kind of music do you like to listen to?

I like Frank Sinatra, Jimmy Smith, Eric Clapton, Elvis Presley, Santana… I also like soft jazz and Bossa Nova.

— Do you buy records over the Internet?

Lately, many people learned about this hobby of mine and I started getting many gift records. I also make such presents in return to those who are interested. I keep a large collection of music on my iPhone, too. Several gigabytes. Occasions when I can take my time at home in front of the music center are very rare. But I manage to listen to some recordings when I’m on the road or away from home on a business trip. It turns out that quality has to be sacrificed for availability.

— Can you be found on any of the social networks?

I use both Facebook and Instagram, but under a nickname. I hardly write any posts myself and my friends there are very few – no more than a dozen. It is discussions of events and users’ commentaries that I am interested in.

Possibly, my job and profession have left an imprint. By virtue of my office I have speak in public very often to explain the budget and the financial policies.

— Do you really know a way how to ‘pay Paul without robbing Peter’?

To tell you truth, I never think in terms like that. One and all are invited to judge for themselves if we do our job right. The results of the Finance Ministry’s efforts are open for everybody to see.


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