Putin and Gazprom

June 3, 2009 | 00:00

Putin and Gazprom

Under Vladimir Putin's terms in office Gazprom, Russia's largest energy company, has performed extremely poorly. Production has not risen since 1999, despite high economic growth and increasing (domestic) demand for natural gas. The company has been loaded with debt while losing control over assets worth more than $60 billion dollars. These are some of the findings in an article by Boris Nemtsov and Vladimir Milov, respectively former Russian Minister of Energy and former Russian Deputy Minister of Energy.

The authors explain that Gazprom is of paramount importance to Russia's economy. No other corporation in Russia has such political and economic clout. In fact, as argue by Nemtsov and Milov, it is the powerhouse of Russia's economy: the stability and future of the Russian economy depend on how well and reliable this corporation works.

Vladimir Putin, Russia's former President and current Prime Minister, immediately recognized the importance of the company and started reorganising it soon after taking office late 1999. First he replaced its President Viktor Chernomyrdin by his companion Dmitri Medvedev, Russia's current acting President. A year later he appointed another one of his former St. Petersburg allies, Aleksei Miller, as Chief Executive Officer, replacing Rem Vyakhirev, who headed Gazprom since 1992. Furthermore, the authors argue that Putin devoted a considerable amount of his time to Gazprom's internal matters. Gazprom has in their eyes become Vladimir Putin's prime personal project. They question however whether his actions have been for the good of the country.

Read the article here

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