“Putin listens to her”: this is the woman who keeps the Russian economy alive Chechen ruler Kadyrov speaks of offensive – the night update

At the beginning of the war, there was great concern about the empty shelves of supermarkets in Russia. Would the imported goods still be available if the many Western companies left the country as announced? Would stores close at all?

After more than a year of war, it is clear that things have changed in Russia and some stores with Western brands such as Zara and McDonald’s have actually closed. At the same time, Russia has reacted and replaced international brands with Russian ones in some places. The supermarket shelves are full. And in general, Russia is in a relatively good economic position: so far the war of aggression has not led to hyperinflation, nor has the country become insolvent.

Dictator Vladimir Putin owes this to one woman: Elwira Nabiullina, head of the Russian central bank. While many specialists and experts fled the country after February 24, 2022, she stayed. It is guiding the Russian economy through the crisis. And with success: it calmed the Russian financial world and stabilized the currency. It is the 59-year-old who keeps the Putin system alive – and with it the war. And that despite the fact that she was initially regarded as critical of the war and Putin is said to have even offered his resignation.

How did you arrange that? And who is Elvira Nabiullina, the most powerful woman in Russia?

Nabiullina grew up in poor conditions, the financial career was not in her cradle. She spent her childhood in Ufa, a Western Russian oil city, railway hub, a little over a million inhabitants. The mother was a factory worker and the father a driver. However, in the 1980s she made the leap to the elite Lomonosov Moscow State University. Mikhail Gorbachev and Boris Pasternak also studied there.

After studying economics, she quickly rose to become a consultant on economic and trade issues, working for associations, supervisory boards and later the Ministry of Economic Affairs. There she won Putin’s trust with financial policy decisions. In 2013, he made her head of the Russian central bank. As the first woman from a G8 country. A consistent increase for Nabiullina, but also an award.

Since then, she has not only been influential in Russia, but also very well connected in the international business world. In the West, she is considered very professional. It has modernized the Russian economy and closed some corrupt banks. Former IMF chief Christine Lagarde compared Nabiullina’s qualities to those of a great conductor in 2018. And: Nabiullina also brought in experts to the central bank who had previously studied and done research at elite Western universities.

At the beginning of the war, this all indicated that Nabiullina would break away from the system. Her good international reputation would have enabled her to take up a well-paid post in the West after the start of the war.

And in fact, soon after the attack on all of Ukraine began, Nabiullina appeared in public in black, as if in mourning. She wore flashy, ambiguous brooches, including some kind of pop-up figure interpreted as a symbol of the Russian economy. Like former US Secretary of State Madeleine Albright, she probably wanted to make a statement without saying it openly. But how critical is Nabiullina really?

Someone who can answer this question is former Moscow business journalist Alexandra Prokopenko. She knows Nabiullina because she herself worked for several years as a consultant at the Central Bank of Russia. It must have been painful for Nabiullina to see the war destroy what she had fought for all these years, says Prokopenko.

At the time, the head of the central bank admitted that the so-called special operation represented a “structural transformation” for the domestic economy. She had always fought against major state interference in the economy. Nabiullina is considered to be economically liberal. And now she had to act herself.

Prokopenko is a researcher at the Berlin institutes ZOiS and DGAP and writes for The Bell. As an adviser to the Russian Central Bank, she was responsible for communications issues related to inflation under Vice President Ksenia Judaeva.

That she has still not left the country, like many others, is mainly explained by the central bank president’s sense of duty. Nabiullina knows that many people depend on her, says Prokopenko.

At the same time, she has no illusions that she can end this war. But she could have a direct influence on the Kremlin in her area. “Putin listens to them,” says Prokopenko. Not politically, of course, but certainly economically. The Kremlin ruler addresses them in public by their first names.

Prokopenko experienced her former boss as a coldly calculating economist: «Nabiullina tries to look at every situation from different perspectives and collects as much information as possible before making decisions. Emotions don’t matter.”

The Regensburg Russian researcher Fabian Burkhardt also describes her as rational: “The decisions taken under her are based on science, on scientific articles and scientific research.” According to the Russia expert, regular reports from the central bank are “critical and objective and reflect a realistic assessment”. So Nabiullina is one of those people close to Putin who dares to put facts on the table when others have presented embellished figures in the past.

Former central bank official Prokopenko, on the other hand, believes rumors that Nabiullina Putin tendered her resignation after the outbreak of war are unlikely. “That’s not how the central bank system works, and that’s not how Nabiullina works,” she says. “Even if she had had doubts, she wouldn’t have shared them with anyone.” That goes against their values. She has always subordinated herself to her work in the Russian economy. ‘She works hard. And by that I mean: hard,” says Prokopenko.

She is therefore not surprised that in February 2022 Nabiullina decided against the free, global economy – and in favor of dictatorship. A withdrawal would have been seen as a betrayal of Putin. She stayed. And Putin honored that by extending her term for another five years.

Another possible reason for this: he owed it to her foresight that he was able to go to war at all. Following the Russian annexation of Crimea in 2014, Nabiullina began building one of the world’s largest foreign exchange reserves. As a result, in February 2022, Russia had huge amounts of financial resources, savings, if you will, of $643 billion. Some observers interpreted this as preparation for a full-scale war against Ukraine.

Despite this, chaotic scenes followed immediately after the Russian invasion of Ukraine. The ruble plummeted and temporarily lost half its value. The West blocked parts of the foreign exchange reserves and froze Russian assets. Payment providers such as Visa and Mastercard blocked their services and Russians could suddenly no longer use their credit cards abroad. Western companies left the country in panic. The danger of a run on the banks and foreign exchange flowing abroad was great. “This panic has cooled Nabiullina,” says Prokopenko.

Burkhardt is a political scientist at the Leibniz Institute for Eastern and Southeastern European Studies in Regensburg. He conducts research on political institutions in authoritarian regimes and is editor of “Russian Analyses” and “Ukraine Analyses”.

The head of the central bank slowed down financial flows in the country early on – at a time when there were hardly any signs of dramatic inflation: she introduced capital controls and thus prevented Russians from hastily withdrawing their assets from Russian banks and out of the banks. would get. country. She put the Russian economy in an artificial coma. At the same time, it doubled the policy rate to 20 percent.

That worked. While people and companies were still taking their money from the banks in March, they were already bringing it back at the end of April. High interest rates made loans unattractive, but interest on deposits became attractive to people again.

Nabiullina also forced export giants such as Gazprom and Rosneft to exchange the revenue they generate in dollars or euros for rubles, protecting the domestic economy. When the chaos subsided, it cut the policy rate again.

Nabiullina took another decisive step: she froze the assets of foreign investors in Russia. The country no longer had to pay premiums to foreign investors from the remaining reserves.

Putin must have made that clear: no one can do this job better than Nabiullina. She must be convinced of that too. Giving up means exposing the economy to a high risk of mismanagement, and that is not an option for them, says Russia researcher Burkhardt. “That’s why she compromised with the devil.” She resembles the typical Russian technocrats: “Nabiullina is very skilled and adapted.”

“She is an economist who can talk tacheles. Even before Putin,” says Burkhardt. This in turn, paradoxically, plays into the regime’s hands. The central bank is a kind of stabilizer in the Russian system, Burkhardt explains. regime itself is highly corrupt and inefficient, but backed by a functioning central bank.

The question is what will become of Nabiullina if Putin resigns or dies. Burkhardt and Prokopenko consider it impossible that she aspires to politics. “She never had any political ambitions,” says Prokopenko. “Nabiullina is completely apolitical. Expertise counts for them,” says Burkhardt. Putin appreciates his technocrats for that too: they remain outside his politics.

However, an international career, especially in the West, is no longer an option for her. Many of the international contacts have since been broken, says Burkhardt. For Western economic institutions and companies, the head of the central bank, himself subject to sanctions, has long been persona non grata.

Prokopenko sees an academic career in Russia as a possible career move, although the current job is “the icing on the cake”, Nabiullina could hardly get any higher. The question is whether she will still be working at all after the end of her regular term in five years. According to Russian law, she would have already reached retirement age.

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