Eduard Popov — Putin's Anti-Corruption Purge continues: Now not even ministers are safe

Several days ago, big news gripped headlines: Russia’s Minister of Economic Development, Aleksey Ulyukaev, was arrested for receiving a bribe in the amount of $2 million. The supposedly unsinkable minister is now confessing enormous evidence to detectives of the Investigative Committee.
A little later, the news appeared that President Vladimir Putin had received all information on the progress of the investigation of the minister. In other words, Ulyukaev’s appeal to the president will come to naught, as the head of state was informed from the beginning on the course of investigations against corrupt members of the government.

On the same day that Ulyukaev was arrested, the heads of law enforcement agencies and deputies to the governor of the Kemerovo region were also arrested for taking bribes. Today, November 16th, additional news has emerged: the investigation is being carried out not only against now ex-minister Ulyukaev, but also a number of senior officials. This has been reported by the newspaper Vedomosti citing a senior employee in security agencies.
According to the report of this well-informed publication, Deputy Prime Minister Arkady Dvorkovich, presidential aide Andrey Belousov, aide to First Deputy Prime Minister Igor Shuvalov, Marina Romanova, and the head of the Economic Development Department, Oksana Tarasenko, have also become targets of the investigation.

What does all of this mean? Several things are immediately indicated.…

Putin started this purge some time ago, selecting a highly qualified and respected chief investigator and giving him free rein independent of normal channels and the chain of command.

While many in the West are viewing this a political purge, it is the result of the crackdown on corruption bearing fruit. It is political to the extent that there is a presidential election coming in 2018 and corruption is a big issue in Russia. Putin clearly intends to get ahead of the curve on it.

China under Xi has been pursuing a similar track under the Chinese rubric of "tigers and flies." Tigers are high officials and flies are local ones.

We'll see if Trump intends to do something similar in the US under the rubric of "draining the swamp." One of Steve Bannon's major complaints has been the double standard of American justice with the corruption at the top getting a free pass, which he views as outrageous.

Fort Russ
Putin's Anti-Corruption Purge continues: Now not even ministers are safe

Eduard Popov for Fort Russ - translated by J. Arnoldski

It should be emphasized that Ulyukaev has been charged but not convicted. Allegations must be sustained in court. It is not clear whether this was a result of infighting among elites.

The Duran
First thoughts on arrest and sacking of Russian economy minister
Alexander Mercouris

For a Western view see

Stratfor
The Fate of Russia's Liberals

The trouble with the "liberal purge" hypothesis is that Alexy Kudrin, former finance minister and a liberal, has said that in his view the arrest was not political.

The detainment of the former Russian Economy Minister Alexei Ulyukayev, later charged with taking a bribe, was not political, according to a former Russian finance minister. 

"I do not see any political motives here," Alexei Kudrin said Tuesday on the sidelines of the Moscow Exchange Forum in New York.

Sputnik
Arrest of Russian Ex-Minister of Economy Not Political - Ex-Finance Chief

Alexander Mercouris — Russia's Economics Minister Slams Central Bank - Alexander Mercouris

Interesting article but also depressing. Central bankers all seem to be cut from the same cloth, focused on the price level rather than the big picture.

In contrast, Mercouris quotes [Reichsbank head] Hjalmar Schacht approvingly:

Central banking requires a grasp of economics, but it requires something more, which [Russian economics minister Aleksey] Ulyukaev has but which [Central Bank of Russia chief Elvira] Nabiullina for the moment does not.
What that is was best summed up by the man who was arguably the twentieth century’s most famous — or notorious — central banker: Hjalmar Schacht, the man who headed the Reichsbank for most of the interwar period.

“…..the arithmetical nature of finance seems to inspire the mathematically-minded, and their efforts always tend in the same direction, towards the creation of an automatically functioning solution operating according to fixed mathematical rules. But the currency problem is not a problem which can be solved according to fixed rules. If it were, then perhaps a capable professor of mathematics would be the best financier after all. Monetary policy is not an exact science but an art. As such it is a sphere which will always remain mysterious to the man who is not capable of mastering that art, while appearing simplicity itself to the man who is.”

This is not to say that the Central Bank of Russia has the freedom or the Fed, Bank or England or ECB, however. Countries that don't issue reserve currencies have to watch their foreign reserves just as central banks use to have to watch there gold reserves. This means that the central bank may have to use interest rates not only to target inflation but also the exchange rate, and Nabiullina did caution firms away from borrowing in foreign currencies. This is especially the case when the US plan was to use balance of payments issues to undermine Russia. But it seems way to early to be talking about targeting an inflation rate of 4% in the future although that's likely just jawboning to held quell inflation that's a current issue.

If economic minister Ulyukaev actually understood the situation he would realize that the opportunities lie through looser fiscal policy rather than looser monetary policy. But he is former central banker and monetarist. If anyone is shown the door, it should be him.

Russia Insider

Russia's Economics Minister Slams Central Bank - Alexander Mercouris
Alexander Mercouris