Over the past year, society has changed course and begun moving along a course towards increased political mobilization, Kudrin believes – one that is impossible to reverse.

“The decrease in protesters might give the impression that society is returning to political stagnation,” he said. “But that would be a mistake.” On the contrary, Kudrin predicts that civil activity is only going to increase in the coming year.

The year 2012 saw an upswing in calls for political action within society. Among the most prominent examples, Kudrin cited the volunteer camps in Krymsk after that city suffered a devastating flood this past summer and electoral observation organizations.

At times, these projects were developed in spite of government actions that stifle civil activity. “There is a series of laws, such as the changes in the definition of ‘state treason’ and the stricter law on mass protests, that has led to a rise in distrust in populist actions,” Kudrin said. “The chance to reduce the tension within society that followed the parliamentary elections [in December 2011] has been missed.”

Kudrin noted that the government did take some positive measures, such as easing political party registration and a introducing a mixed electoral system, but said this was not sufficient.

The ex-finance minister had a reserved opinion about the Russian opposition’s new Coordination Council, which held elections last October. “We were interested to watch the council’s elections. It was a good experience. However, in my opinion, they should have chosen a platform and then, after that, formed a structure. The Coordination Council did it the other way around,” he said.

Kudrin had even harsher words about the negative effect on the Russian economy of the Kremlin’s anti-Western rhetoric. He argued that it is impossible to talk about Moscow as an international financial center if the government remains so suspicious of foreigners.

“The largest companies already doubt whether it’s worth expanding their staffs of international employees or whether it’s better to cut them back. These businesses haven’t been given clear rules of the game,” he said.

He also strongly criticized the work of Prime Minister Dmitri Medvedev’s cabinet. “Instead of privatization, we’re seeing creeping deprivatization,” Kudrin said. “Although, the Rosneft deal to buy TNK-BP has led to the deregulation of 40 billion dollars in shares. That’s several times bigger than all of the government’s privatization plans.”

Kudrin said that Russia’s accession to the World Trade Organization was a positive step, but noted that the decision had already been made under Medvedev’s presidency, not Putin’s. He declined to comment directly on Medvedev’s decision not to run for a second presidential term.

While the economic plan that Putin put forth during his December 12 address to parliament was good, Kudrin said, “there aren’t realistic ways to implement it.” He also believes that the president still has not firmly established policy for his third term and could still change course.

One important factor to support the country’s economic growth is migrants, the former finance minister added. “The state should strictly regulate migration. Today we issue about 2 million work migration permits, but in reality we have more than 10 million migrants,” he said. “This speaks to the fact that we have insufficient regulation. We need to help migrants become legalized and attract workers while taking local communities into account. The size of our working population is shrinking.”

Kudrin, who is considered one of Putin’s closest confidants, resigned as finance minister last year just days after Putin announced that he planned to return to the presidency. At the time, Kudrin complained that he could not serve as finance minister under a cabinet led by Dmitri Medvedev, who then suggested that he resign.

In the time since then, Kudrin has founded the Civic Initiatives Committee. “It’s not a political party and it has no goals of taking over the government,” Kudrin explained. “We opened the New Government School to teach those who are interested in working for local governmental agencies. People of entirely different convictions come here, from Parnas to members of United Russia.”

Kudrin also announced that the committee was going to work to support honest journalism, the defense of businesses, and social/cultural projects.

“Why am I, an economist, doing these things? Because economic reforms are hindered by an imperfect political system,” Kudrin explained.

In remarks today at the official opening of the St. Petersburg International Economic Forum, Russian President Dmitri Medvedev spoke about his goals for Russia’s economy and how state policy would be shaped to achieve them, Interfax reports.

“Russia,” the president said, “must become an attractive country that people from all over the world will aim for in search of their dreams. In search of the best opportunities for success and self-realization, which Russia can give to everyone ready to heed this call and love Russia as their new or second home.”

“Such are the goals of our modernization – they are realistic and achievable,” Medvedev asserted. He added that favorable conditions for modernization are currently developing in the country’s economy. He also said that state fiscal policy would be shaped with this in mind.

The three-day forum, which began Thursday afternoon, brings together European leaders, representatives from international corporations, economists, and other global policy makers to discuss modernization and development in emerging economies. A range of topics, including energy and security policy, are expected to be covered.

A presidential aid had stated earlier that Medvedev’s speech “will be mainly dedicated to Russia and the way we have changed.”

The Russian president singled out inflation in his opening remarks as one of the primary issues faced by his country’s economy. He also said that the inflation rate has fallen over the course of the year and is now hovering at about 6%.

In his turn, Russian Prime Minister Vladimir Putin pledged that inflation would not rise above 5-7% over the next three years, with the top target for next year set at 6.5%. He stressed that citizen trust in state policy was the key factor for successfully overcoming economic difficulties, and that Russians do indeed trust the ruble and their domestic banking system.

Former Economics Minister and Scientific Director of the Higher School of Economics Yevgeny Yasin said that the figures cited by the prime minister are realistic, but that inflation in Russia must necessarily fall to around 3-4%. In an interview with Ekho Moskvy, he also stipulated that the best time for prices to fall – the crisis period – had already passed.

While Russia has reported a decline in inflation each month since August 2009, some analysts say that the government’s reliance on consumer prices to calculate the rate presents a false reading of actual inflation. “Consumer prices,” says political commentator Sergei Shelin, “only make up a part of all prices. All the remaining prices are growing, and seem to know absolutely no shame.”

A panel entitled “Finance after the Crisis” was held in the same room after Medvedev’s remarks. There, according to the newspaper Vedomosti, influential global financial analysts discussed whether or not the presidents’ goals were achievable. The newspaper reported that of those present at the panel, 61% believed that the Russian financial system faces stagnation over the course of the next 2-5 years. About 5% expect another crisis, and the last third are optimistic that Russia will see a speedy rate of growth.

At another panel later in the day, Russian Finance Minister Alexei Kudrin said that the task of cutting the budget deficit is harder for Russia than other European countries. This, he explained, has to do with the fact that the state treasury is highly dependent on the oil and gas sector. Kudrin reminded his audience that the current cut in Russia’s deficit is happening as a result of high oil prices – not because of the efforts of the government.

The finance minister also said that a rise in the retirement age would be an unavoidable result of the budget deficit, and confirmed plans for substantial increases in taxes on gasoline, alcohol, and tobacco.

From the Moscow Times:

Kasyanov told the Khamovnichesky District Court that the changes were politically motivated and contradicted the everyday practices of oil companies.

“By the end of 2003, I had a clear understanding that both were arrested under political motives,” he said.

Kasyanov said he tried to talk with Putin after Lebedev was arrested in July 2003 and Khodorkovsky was arrested in October that year, but Putin refused to discuss the issue with him. Only on the third try did Putin reply, he said.

“I asked Putin to clarify what he knew about the situation, but he refused twice, and then he gave me an answer,” Kasyanov said.

“He said Yukos financed Yabloko and the Union of Right Forces, political parties that it was allowed to finance, but also the Communist Party, which it wasn’t allowed to.”

Khodorkovsky and his lawyers have been trying for months to convince the court to call the prime minister as a witness. Until Monday, it had dismissed this possibility as “premature,” despite a series of questions penned by Khodorkovsky that only Vladimir Putin would be able to properly address.

After Kasyanov’s testimony, the idea that such a subpoena would be premature made even less sense than before. Therefore, lawyers for the defense requested once again that the court call in Prime Minister Putin, as well as Russian Finance Minister Alexei Kudrin, arguing that new circumstances had come to light that made their interrogations necessary for the case.

On Thursday, however, the court turned down the lawyers’ request. Judge Viktor Danilkin had said previously that he “did not find any legal basis” for the subpoenas, and now said that the new arguments by the defense left no different impression. The prime minister and finance minister would be interrogated only if they personally appeared in court, he said.

Prosecutor Vyacheslav Smirnov, meanwhile, made it clear that there would be no interrogation of the prime minister in the Khamovnichesky Court, period. When journalists asked him why, Smirnov responded: “Because we live on the ground.”

“For Russia, with its massive international reserves, constant budget surplus, and large stabilization fund, it would seem the crisis shouldn’t exist,” Luzhkov said in the interview.  “But nonetheless, our [stock] quotes collapsed by three to five times, while in Europe, which is closer to the source of the crisis, they fell by merely 30-50 percent.”

The mayor blamed Finance Minister Alexei Kudrin for the decision to keep oil windfall in a government stabilization fund.  The funds, he said, should have been used to boost Russian infrastructure and the real economy.

“The monetary policy of our authorities is one of the main reasons why we are now facing such grave problems in the real sector,” Luzhkov added. “Monetarism should be abandoned.”

Russian manufacturing output fell by nearly 20 percent in January, marking the biggest drop since the mid-1990s, when Russia suffered a severe recession.  In the automobile industry, Prime-TASS reported that production was down nearly 80 percent in January, as plants shortened work-weeks and extended involuntary holidays.  Russian President Dmitry Medvedev on Monday fired four regional governors for poor management of the crisis, as public confidence in authorities showed signs of waning.

Luzhkov also blamed business and Russian business leaders for borrowing heavily from the West, and failing to invest the money into Russia.  The country’s wealthiest individuals, known collectively as “oligarchs,” spent more on personal luxuries like “football teams and yachts” than the good of the country, the mayor said.

On February 10th, Luzkhov told Kommersant (Rus) that the government should “temporarily” take away businesses from the oligarchs, develop them, then resell them on the open market when the economic crisis ends.  The state should do everything in its power, he said, “to prevent bankruptcy of the strategic industries that ensure the country’s sovereignty.”

“The government must take away these businesses, but not to create state capitalism, but to put them on the market when the crisis situation ends.”

Previously, Luzhkov also alleged that the United States was completely to blame for the global economic crisis.  In a system where goods are sold for money, the US replaced the goods with “papers,” which it then used to “flood the whole world,” he said.  Russia, meanwhile, did not have the conditions which would typically lead to a recession, according to the mayor.

The 70 dollar mark is significant for the Russian government, which relies heavily on tax revenues from oil and gas extraction.  In September, Deputy Prime Minister and Minister of Finance Alexei Kudrin made the public announcement that Russia’s 2009 budget would enter a deficit if oil prices sank below 70 dollars per barrel.

“70 per barrel is the price of a balanced federal budget for 2009,” Kudrin had said, noting that the budget was formed with that price in mind.  “That being said,” he went on, “the budget forecast for the average cost of oil in 2009 equals 95 dollars per barrel.”

Analysts said that the dropping oil price was related to three major issues: slowing economic growth connected with a global recession, a growing difficulty in obtaining credit, and increased production outputs from non-OPEC member countries.

The inter day drop may also relate to a Nigerian court decision, which mandates that Royal Dutch Shell hand over control of a major oil terminal to the local population.

OPEC, meanwhile, may lower their daily production output in response to the falling prices.

“It will be one million [barrels], or more,” Qatari Oil Minister Abdullah al-Attiyah told the al- Jazeera television channel. “Prices have fallen a lot and we need to take measures.”

Prices were frozen by the government in mid-October, in an effort to delay the effects on ordinary citizens, and to ensure stability before December State Duma elections. Alexei Kudrin, Russia’s Finance Minister, noted that “Freezing prices was a voluntary act on the part of private enterprise in response to a request from the Russian government: both understood the importance of the pre-election time.” The price agreement expires on February 1st.

Inflation, which was previously forecast at around 8 percent for 2007, is now expected to reach 12 percent for the year. Speaking to RIA Novosti, Kudrin attributed the increase to high oil prices, rising worldwide food prices, and a large influx of capital into Russia. Some analysts added that the rising price of crude has led to a fuel shortage inside Russia, as oil producers rush to the export market.

While some analysts remain pessimistic about 2008, the Finance Ministry is hopeful about the future. “We have already counted these factors into next year’s prognosis, and we expect a reduction of inflation to 8.5 percent,” Kudrin said.