Kudrin to Attend Davos With Little-Known Aide

Finance Minister Alexei Kudrin will join a sovereign wealth funds discussion at the Davos forum accompanied by a little-known official while his deputy remains in jail, sources said Friday.

A source at the Finance Ministry said Dmitry Pankin, currently head of the ministry's state debt department, would travel with Kudrin to Davos and might also soon be promoted to the rank of deputy minister.

"Different candidacies are being discussed, including Pankin's, but there is no final decision yet," a source said.

Kudrin, the country's chief economic policymaker, may have up to five deputies, although until now he has had only four.

Pankin will oversee the split of the $151 billion stabilization fund on Feb. 1 into the Reserve Fund, which will act as an insurance policy to cover any budget deficit caused by a fall in energy prices, and a more growth-oriented subfund called the National Welfare Fund.

He replaced Sergei Storchak, who became Kudrin's deputy as the debt department's head in 2005.

Storchak, the country's top foreign debt negotiator and supervisor of the stabilization fund, was arrested last year and charged with embezzlement of public funds and fraud. Storchak denied the charges.

Analysts say the prosecution may reflect a struggle between Kremlin factions for control over the state's vast cash hoard as President Vladimir Putin prepares to step down from office.

A Moscow court decided this month to keep Storchak in custody until April 9, meaning that he will remain behind bars until after voters elect a successor to Putin in early March.

Kudrin had offered to vouch personally for Storchak's proper conduct if he were released on bail. The source said the ministry's stance on Storchak's arrest had not changed and that Storchak would remain a deputy minister.

"But even if the whole story ends well and Storchak is out of prison, he will not be able to start working and traveling abroad immediately: someone needs to run debt negotiations," another source at the ministry said.

Kudrin and Pankin will be in the spotlight of this week's debates at the World Economic Forum in Davos over sovereign wealth funds, state-run investment vehicles that manage assets whose global value totals $2 trillion.

Pankin, 50, worked in the St. Petersburg Mayor's Office at the same time as Kudrin and Putin, but left in 1994 to work at a private bank.

In a interview last month with Reuters, Pankin said Russia would keep the stabilization fund entirely in sovereign bonds this year and would not invest the $19 billion National Welfare Fund in corporate debt or stock.

The decision means that Russia will not this year join the ranks of countries like China or Singapore, whose sovereign wealth funds cause concern in the developed world over possible aggressive acquisitions and low transparency. Kudrin will be the only top Russian policymaker attending the Davos forum, which opens Wednesday. First Deputy Prime Minister Dmitry Medvedev, who made his international debut in Davos last year, will stay away to focus on his presidential bid.