The Kremlin's drive to boost control over the economy risks breeding corruption and sapping economic growth, Yegor Gaidar, architect of Russia's market reforms of the early 1990s, told Reuters.
Gaidar, who unleashed shock therapy before the dust had settled on the ruins of the Soviet Union, said the state was a poor manager and warned against nostalgia for the Soviet empire.
The risks of corruption and nepotism rise with state control, which hurts economic growth, said Gaidar, 49, who now heads the Institute for the Economy in Transition.
"I am afraid that there could be additional moves on nationalisation in certain sectors - above all in fuel and natural resources, everything connected with the defence complex and perhaps in certain other industries," Gaidar said in a recent interview.
"You don't steal from yourself and if it is your company you do your utmost to make sure people steal less. "If it is a state company and you are at the helm, it turns out you have a lot of friends and relatives who have problems and need help. But the money is not yours - it is the state's."
Under President Vladimir Putin, state energy companies Gazprom and Rosneft have brought some of the privatised gems of the Soviet oil industry back under Kremlin control and other state firms have widened control in the banking, automobile and media sectors.
Gaidar said there was no chance of turning back the clock on private ownership, but he questioned the reasons for boosting state control over industry.
"What do we mean by the strengthening of the state? If we mean that we will have effective, non-corrupt tax service, non-corrupted courts, a non-corrupted police, effective armed forces, then I would vote for that strengthening of the state with both hands. But we don't have that," he said.
AWE AND ANTIPATHY Gaidar, a tubby economist who became Boris Yeltsin's reform commissar, provoked awe and antipathy for freeing prices in 1992 and for launching the first wave of privatisations.
Opponents say those moves - which devalued the savings of millions of Russians and gave a handful of "oligarchs" their chance to grab the fallen superpower's assets on the cheap - discredited Russia's reforms.
Supporters say Gaidar cemented the transition from communism, and he himself defended his reforms as laying the foundations for Russia's rising prosperity today.
He praised reforms during Putin's first term, but said the two-year-old government of Prime Minister Mikhail Fradkov was faltering and may fail in its goal of modernising the ailing health and education systems.
"I am of the view that if you are not capable of reforming it is better not to reform," Gaidar said. "They are not managing terribly well." Comparing Russia to Germany's fragile Weimar Republic, toppled in 1933 by Adolf Hitler's rise to power, Gaidar said many Russians poorly understood the reasons for the Soviet Union's collapse, which Putin has called a tragedy.
Gaidar said Kremlin leaders were dicing with the devil by stoking nostalgia for the Soviet empire, and warned against trying to play the nationalist card.
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