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1 Dec, 2008 19:09

Obama’s teammate with shady Russian past

Members of Obama’s economic task force are already rolling up their sleeves to fight the recession. Among those due to guide America through the financial crisis is Larry Summers, who will be the president's senior financial advisor.

There may be some big international stars on Obama’s new dream team, but Larry Summers is no plain professional. Not only has he run the World Bank but he served in the Clinton administration and was president of Harvard. But despite the impressive CV he’s also been a controversial figure both at home and abroad throughout his career.

“I have to say that for someone protecting the interests of the US, he was very efficient. He tried to force a model on us, which turned out to be suicidal for the Russian economy,” says economic expert Sergey Glazyev.

Summers will head the National Economic Council as Obama’s senior financial advisor. He’s known for being a keen advocate of deregulation, a policy he exported to Russia with disastrous results in the late nineties. Some who worked with him conceded he knew what he was doing, but could be blinded by his own convictions.

“There was a little bit of this attitude of ‘we know everything, and you guys don’t know anything’,” recalls Viktor Geraschenko, former Head of Russia’s Central Bank.

A number of his actions as president of Harvard caused controversy, including sexist remarks and a US$ 26-million lawsuit, again involving Russia.

The university and a close friend of Summers’s settled a claim by the US government of a conflict of interest in Russia’s privatisation programme in 1990s, which allowed many to get rich quick.

Sergey Glazyev says Summers’s new appointment could mean more trouble.

“This is an attempt to further maintain an ineffecient financial system that is completely unbalanced, in which the US prints money and finances their spending and the rest of the world pays,” he says.

When news of his appointment became known, the media began remembering the economic policies of the past, but also the scandals that have dogged Summers over the years. His record could prove to be a burden to the new administration, whose central promise was one of change and renewal.

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