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Banking

Neither one thing nor the other

The tussle between liberals and dirigiste conservatives in Russia's ruling circles shows no signs of subsiding. Analysts are uncertain of the meaning of it all. The dismemberment of Yukos was a clear manifestation of the conservative line but there are indications that liberal intransigence is winning back ground

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RUSSIA WATCHERS ARE confused. "It's real Jekyll and Hyde stuff," says Anton Shruchenevsky. "The government continues to give off mixed signals, as one minute the Siloviki are riding high and the next the liberals move to the fore. It is completely confused and no-one has any clear idea of who is going to come out on top."

Shruchenevsky's confusion is typical of the bafflement of analysts trying to make sense of the conflicting signals sent out by Russia's political elite in the past few months. An economist with Moscow investment bank Troika Dialog, he reels off a string of liberal economic reforms that the government has recently announced and then follows this with as many examples of attempts by the conservative Kremlin faction of former KGB officers, dubbed the Siloviki, to push a statist policy that puts some of Russia's most lucrative companies under their direct control.

The government is sending out such mixed signals that Russia watchers' heads are spinning. The Russian stock market has been struggling to shake off a pall of fear in the aftermath of oil company Yukos's destruction, and foreign investors have pulled back, waiting to see which faction will triumph in the battle for control over Russia's economic policy.

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