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. Last Updated: 07/27/2016

Kudrin Wants World Financial Watchdog

The world needs a new financial watchdog to cope with the consequences of the global crisis, Finance Minister Alexei Kudrin wrote in an article published ahead of a G20 financial sherpas' meeting.

Russia is spending its way out of its worst economic downturn in a decade, with the economy expected to shrink 0.2 percent this year. Despite the downturn, which Kudrin said would see the current account surplus slashed to zero in 2009 from $99 billion in 2008, Russia is also seeking to increase its role in global financial affairs, where it feels sidelined by Group of Seven nations.

"For now, the [industrialized] countries unite around the Financial Stability Forum. However, it does not include emerging nations such as BRIC countries," Kudrin wrote in Voprosy Ekonomiki magazine.

"Today there is a need for an international authority whose recommendations are mandatory."

At a meeting in Washington, the G20 agreed to add emerging market economies to the Financial Stability Forum, where top bank regulators evaluate banking and market risk.

They also agreed to study ways to give the emerging countries more seats at the International Monetary Fund and World Bank. Russia holds a seat in G8 but is excluded from financial decision making.

Four working groups are expected to present interim reports on IMF and World Bank reform and financial regulation at next week's meeting that will be attended by Deputy Finance Minister Dmitry Pankin.

At home, Kudrin, often criticized for lack of strategic vision, which would help Russia lessen its dependency on commodity exports, is fighting an uphill battle to minimize a budget deficit amid a large-scale government bailout.

"The deficit will not only arise in 2009 but will be significant," Kudrin wrote, without disclosing the figure. He added that Russia should strive to have a more "acceptable" deficit of 5 percent of GDP in 2010 and 3 percent in 2011.

Prime Minister Vladimir Putin ordered Kudrin to rewrite the budget based on the average 2009 price for oil at $41 by Monday, although Kudrin has suggested that he wants to use a more conservative estimate.

Kudrin was in China when the government meeting backed the new oil price forecast, and sources said the new budget would not be ready by the deadline Putin had set.

Kudrin wrote that Russia should be careful cutting taxes, providing help to troubled enterprises and nationalizing banks. He estimated a total value of the anti-crisis measures at about $61 billion to $64 billion, or 5.2 percent to 5.4 percent of GDP.

The number excluded $50 billion allocated from gold and forex reserves for corporate foreign debt redemptions by the largest firms -- a measure dubbed an "oligarchs' rescue package" by analysts.