* Belousov replaces Nabiullina as Putin's economic adviser
* Ulyukayev moves to Economy Ministry
* Staff rotation boosts clout of state interventionists
By Douglas Busvine and Maya Dyakina
MOSCOW, June 24 Russian President Vladimir Putin
appointed Andrei Belousov on Monday as his economic adviser,
beefing up his Kremlin staff with an advocate of greater state
action to revive the weak economy.
Belousov takes the place of Elvira Nabiullina, who has taken
charge at the central bank, in a staff rotation that enhances
the influence of interventionists and further sidelines liberals
who advocate a more market-oriented approach.
"The reshuffle could be interpreted as strengthening the
axes of economic power around President Putin," said Ivan
Tchakarov, chief Russia economist at investment bank Renaissance
In Russia, economic policy is typically the preserve of the
government, and not the Kremlin. Yet, a year into his third term
as president, Putin has taken increasing strategic control,
relegating Prime Minister Dmitry Medvedev to a technical role.
As economy minister, Belousov has come under fire from the
liberal policy establishment for calling for the state to
determine bank lending rates, which he argues would unblock the
flow of affordable credit to the economy.
Belousov was replaced by Alexei Ulyukayev, who is moving
from the central bank after missing out on the top job there.
Nabiullina formally assumed her role on Monday after a year as
the Kremlin's 'chief economist'.
At a meeting with Putin, Ulyukayev said the government's
primary task would be to avert an economic recession and ensure
the government can fulfil its spending promises to Russians.
The job moves, flagged in advance, set the scene for a shift
towards a more activist approach to managing Russia's economy as
policymakers seek to engineer a recovery at a time of still-high
"This is all being done to embark on a dynamic stimulus of
economic growth," said Julia Tsepliaeva, a Russia economist at
BNP Paribas in Moscow.
Belousov, 54, advised Putin during the latter's four-year
term as prime minister - when Medvedev was president - helping
put together an anti-crisis programme to nurse Russia through
the global financial and economic slump.
Nabiullina, regarded as more dovish than her
inflation-fighting predecessor Sergei Ignatyev, has nonetheless
ruled out a dash for growth and warned that monetary stimulus
could end in a toxic combination of stagnation and inflation.
"The long-term impact would in all probability be negative -
we could end up with stagflation," Nabiullina, 49, told Reuters
in an interview.
She did say that the central bank might cut interest rates
in the third quarter of this year if inflation is clearly
falling, but argued that for Russia to achieve higher rates of
growth, deep structural reforms would be needed. These included
cutting bureaucratic red tape and fighting state corruption.
As economy minister, Ulyukayev will be running Russia's
'ministry for growth', which is known for taking a more
expansionist view than he has advocated at the central bank.
The staff moves underscore the marginalisation of the
liberal economic establishment still informally led by former
finance minister Alexei Kudrin, who quit in September 2011 in a
row over public spending.
Kudrin tweeted his support for Ulyukayev: "He is a good
specialist with rich practical experience and deep theoretical
background." He did not comment on Belousov's appointment.
Speculation persists, meanwhile, that Putin's Group of 20
summit coordinator, Ksenia Yudayeva, will land a senior role at
the central bank where she could bolster Nabiullina's authority.
Yudayeva, interviewed by Reuters last week, declined to
comment on her career plans. She did, however, back Nabiullina's
criticism of calls for a weaker rouble.