For those who think that Russia is still capable of pursuing sensible economic policies, the clearest evidence is Alexei Ku-drin's handling of the country's oil windfall. How sensible the finance minister has been, they say: what a contribution he has made to Russia's impressive economic stability. And yes, the petroroubles have been managed prudently. Until now, that is. Set up in January 2004, Mr Kudrin's "stabilisation fund" receives extraction and export-tax revenues that accrue when the price of Urals blend oil tops $20 a barrel, plus budget surpluses (Russia has run a surplus for the past five years). As with similar pots in other resource-dependent countries, the money is there as insurance against a fall in the oil price. Russia's fund also stands guard against a repeat of the devastating default of 1998. It helps ease upward pressure on the rouble: the cash is now supposed to be invested in European and American bonds. It has also helped to combat inflation-although hitherto re- strained government spending and the flight of capital after the government brought Yukos, once the country's biggest oil company, to its knees last year have also played a part.
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