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Kudrin sets out his cuts agenda

Alexei KudrinKRASNOYARSK ­ Finance Minister Alexei Kudrin shook up the Krasnoyarsk Economic Forum on Friday with unprecedented comments that criticised both the government's overspending and its monopoly on politics.

"Coming elections will serve as a test for the government. All forces and representatives of our society should be involved to get the mandate of trust," Kudrin said. "If not, then our efforts will be useless."

- - In an apparent dig at the informal procedures in the government, Kudrin said, "Yes, there are formal rules, but they are being bypassed as we got used to living by 'understandings', not by the laws."

He went to say that rule of law consists of several commitments. "The first of them is political responsibility. The second is responsibility for strategic plans, which we've approved before," Kudrin said.

Analysts interpreted the comments as a clear call to have more political parties registered at the upcoming State Dum and presidential elections ­ to challenge the monopoly that the pro-Kremlin United Russia party has on political decision-making in parliament.

And there was an immediate response from the United Russia party over the seeming attack. "Instead of implementing economic strategy, the finance minister seems to be avoiding... responsibility and instead changing the subject to elections," Sergei Neverov, secretary of United Russia's presidium, said in an official statement.

Kudrin's move to promote liberal economic policies at a time of growing social tension and suggestions of political instability were a "double-edged sword," one analyst said.

In one of his more pointed comments, Kudrin criticised federal budget spending on defence.

"I never thought that we'll be increasing our spending on defence by that much," he told the forum.

"It means that we have to change the budget balance, macroeconomics and probably taxes as far as we talk about an increase, calculated in percentage of GDP, deviating from previous decisions."

He went on to call for the pension age to be raised from 60 to 62 for men, and from 55 to 60 for women ­ a modified form of an earlier demand than men's pension age be raised to 65.

The statements ­ signalling spending and budget cuts ­ puzzled political experts, coming as they did from a senior minister known for caution and balance.

"It's a double-edged sword," Olga Kryshtanovskaya, a sociologist and coordinator of the liberal wing of United Russia, told The Moscow News. Coming amid growing social and political tensions, the measures suggested by Kudrin "could have social consequences in themselves. In other words, to avoid public wrath he is proposing measures that will provoke public wrath."

Kudrin was clearly positioning himself as an economic reformer ahead of the upcoming elections, others said.

His statements come amid "uncertainty about who will be prime minister after 2012, and most importantly, who will be the finance minister," Rostislav Turovsky, an analyst at the Centre for Political Technologies, told The Moscow News. "As such, it's an attempt by Kudrin to position himself as an influential player. Of course he wants to be prime minister. He is stating that a harsh, liberal economic programme is inevitable, and he is positioning himself as a politician who can carry it through. He is offering his services to the next president, whoever that president may be."

But given how unpopular spending cuts may be, Kudrin seems to be prepared to take on the role of a "bad cop", Turovsky said.

Kudrin was clearly positioning himself with one of two government strategies ­ for political pluralism and spending cuts, as opposed to one that called for more controls in order to ensure political stability.

But that did not indicate any schism between Medvedev and Putin, Kryshtanovskaya said. "If Putin returns as president, he may well be more liberal than before. It just means that the elites have two scenarios of development", the more liberal and more statist.

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