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. Last Updated: 07/27/2016

Gref 'Clone' Gets Shrinking Ministry

APEconomic Development and Trade Minister Elvira Nabiullina smiling Monday evening at her first Cabinet meeting.
The appointment of Elvira Nabiullina, a respected economist, to replace German Gref as economic development and trade minister will likely hasten the erosion of the ministry's influence, analysts said.

A former Gref deputy at the ministry from 2000 to 2003, Nabiullina, 43, has been viewed as a key ally who will continue his liberal policies.

Speaking on Ekho Moskvy radio Tuesday, Gref said his former colleague was "one of the most talented managers" and that officials in the ministry had reacted positively to her appointment. He praised President Vladimir Putin for making a "successful" decision.

From 2003 to 2005, Nabiullina headed the Center for Strategic Research, a think tank charged with formulating economic and social policy. She is said to have been influential behind the scenes both while serving under Gref and later at the center.

Ivan Ognev, a director at the center, said Nabiullina was a fair and exacting boss who had gained enormous experience as an economist and from her earlier stint in the government. He said he was confident that she would not abandon the reforms set in motion by Gref.

Peter Halloran, founder of the Pharos hedge fund, said Nabiullina was a "clone" of Gref, in the sense of that she shares his policy and reform views.

While more publicity shy than her predecessor, Nabiullina has been known to criticize economic policy on occasion.

Born in Ufa, Bashkortostan, Nabiullina graduated from the economics department at Moscow State University. She worked at the economy ministry from 1994 to 1998.

After a year in the private sector, she joined the Center for Strategic Research before joining Gref's team at the ministry in 2000. She left again to head up the Center for Strategic Research as the campaign for Putin's re-election geared up. She also led a commission preparing for Russia's presidency of the Group of Eight in 2006. More recently, she has spearheaded work on the realization of the government's national projects.

Just as important as her ability to provide economic guidance will be her ability not to rock the boat in the run-up to the State Duma and presidential elections, some commentators said.

They also said her appointment would serve to strengthen the Kremlin's hold on power, as the Economic Development and Trade Ministry will be deprived of important functions. Speaking to the new Cabinet late Monday, President Vladimir Putin said the functions of the ministry would be "adjusted."

Alexei Sidorenko, an analyst at the Carnegie Endowment for International Peace, said that since her move to the research center, Nabiullina "has been considered more of an expert than an executive. This shift will transform the whole ministry," he said.

Analysts predict that while the ministry will retain its foreign trade role, departments overseeing large cash flows will be redirected to other ministries.

"She will observe and guarantee the decline of the ministry," said Stanislav Belkovsky, head of the Council for National Strategy. "This is the Cabinet of the final stage of power."