TALLINN - Andrei Illarionov, a former economic adviser to Russian President Vladimir Putin and arguably Russia's most quoted economist, told a conference in Tallinn last week that economic growth in Russia is pinned on the steep rise in the price of oil. Without it, he stressed, the gross domestic product of the country would have fallen.
"Economic growth over the past few years is based on a factor by which Russian authorities and Russian economic subjects have no immediate influence," he said.
At first glance, he explained, the situation in Russia's economy appeared to be the best in decades. However, he stressed that the overall picture was more modest if one looked at output volumes, foreign direct investments, export of capital and the quality of economic policy. As an example, he compared Russia with Estonia.
"In Estonia the economy grew by 10 percent, even with the soaring oil prices that constituted an additional burden for the economy," Illarionov said. "With these same conditions, which are extremely favorable due to oil proceeds, the Russian economy only grew by 6.5 percent." Referring to an analysis by the Russian Institute of Economic Research, the former economic adviser, who was shunned by the Kremlin after his criticism of the Yukos affair, said that if the price of oil had not risen last year, Russia's gross domestic product would have fallen by 9.9 percent.
At the same time, large oil export proceeds have given Vladimir Putin's administration the opportunity of showing itself off as having brought prosperity to Russia. "A billion dollars of oil proceeds a day 's what kind of economic reform could give a comparable result?" Illarionov, a pro-market advocate, asked rhetorically. Illarionov worked for six years as economic adviser to Putin. He is now a critic of the regime, going so far as to claim Russia is no longer a free country.
The economist also said the way Russia dealt with the Iranian nuclear crisis had the apparent aim of keeping the price of oil at its present high level.
