"According to Illarionov, state monopolism, mass-media monopolism and ideological monopolism are currently being manifested. This presents the greatest threat of them all, Illarionov believes."

By Natalia Melikova
Nezavisimaya Gazeta
No. 277
December 27, 2002
[translation from RIA Novosti for personal use only]

Andrei Illarionov, who serves as President Vladimir Putin's economic adviser, summed up the results of this country's economic development over the 2002 period December 26 at the Center of Strategic Research. On the one hand, the Russian economy continued to grow, what with the national GDP swelling by nearly 4 percent and outpacing similar European economic-growth rates, let alone stagnant Japan. Russia chalked up impressive results this year, all the more so as we compare the national situation with the 1998 economic and financial melt-down. Oil production tends to increase rather quickly; the same can be said about oil exports.

As a matter of fact, sectoral indicators, which were posted over the last four years, have been exceeded by one-third. As a result, Russia now ranks as the world's second biggest oil exporter after Saudi Arabia. These facts show that our country is gradually restoring its economic positions, Illarionov believes. The oil industry's successful performance can be largely explained by the establishment of vertically integrated companies, which are more effective than other entities, Illarionov noted.

Still such good results are something relative. For instance, the Chinese economy grew 100 percent faster. Russia, which boasted the second fastest-growing economy on CIS territory (that is, among 12 CIS countries) four years ago, has now been placed eleventh. The Russian economy owes its impressive performance to the oil industry alone. Meanwhile all other sectors, including the machine-building industry, continued to curtail production.

Many officials and economists must do away with current myths because this is only way to attain an economic break- through. According to Illarionov, the list of such myths includes a firm conviction to the effect that no top quality economic policy can be implemented over the 2003 period, that is, on the eve of parliamentary and presidential elections (as was in 1999).

Moreover, we must forget the fact that fast-paced reforms are better than their contents, and that it's harmful and inexpedient to cut back on federal spending, Illarionov went on to say. We must also forget about the impossibility of ambitious economic growth rates; this means that we have to discard ambitious economic reforms, Illarionov said. Illarionov doesn't doubt the fact that such myths will sooner or later become history. Correct ideas will triumph, he stressed.

These myths being shared by the political elite are not the only thing, which threatens long-term Russian economic development. The RAO UES (Unified Energy Systems) nationwide power grid and Gazprom are not the only monopolists. According to Illarionov, state monopolism, mass-media monopolism and ideological monopolism are currently being manifested. This presents the greatest threat of them all, Illarionov believes.

Elements of censorship are being displayed by those claiming such monopoly rights, rather than by the state. All these developments, which have nothing to do with democracy, amount to the oligarchic concept instead.

Frankly speaking, few oligarchs remain at this stage.

However, one of them boasts tremendous influence. Illarionov is in no mood to disclose his name; still everyone understands perfectly well that he means Anatoly Chubais, who is Illarionov's main opponent. According to Illarionov, when a big-league company's manager tells those attending a Cabinet session that the Government House building is being lit by his company, then this is downright oligarchy. However, any attempts to reduce the influence of big-time business are always fraught with the danger of greater state economic regulation, which, in turn, doesn't facilitate a cost-effective economy. Real-life liberal reforms imply the division of specific spheres of activity between the state and the business community. This will become the economic discussion's main content in the near future, Illarionov stressed.