State must keep out of economy-Russian ministers

[HenryTo]

Various ministers now becoming quite vocal in their opposition to the state's control of the oil industry:
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Friday September 30, 11:12 PM

State must keep out of economy-Russian ministers
MOSCOW, Sept 30 (Reuters) - Two high-profile Russian ministers condemned state interference in the economy on Friday, two days after gas monopoly Gazprom bought control of oil firm Sibneft, handing the Kremlin command of a third of Russian oil.

Finance Minister Alexei Kudrin spoke out against the state bolstering its stake in big companies, while Economy Minister German Gref called a big state role in the economy "Neanderthal" and said its main job was to nurture private enterprise.

These two ministers have often clashed with their boss Prime Minister Mikhail Fradkov, who analysts say favours using state cash to spur growth and would like to throw the government's weight behind so-called strategic industries.

But Friday's comments from two ministers the markets trust as broadly liberal were particularly pointed.

"Today, unfortunately, the share of the state and its interference in the economy is excessive," Kudrin said.

"It becomes apparent in different ways. Most of all by preserving, and sometimes increasing, the share of the state in the biggest companies," he told a meeting of Russia's anti-monopoly watchdog.

Gazprom , in Russia's biggest-ever takeover, bought control of Sibneft , the country's fifth-largest oil firm, for $13.1 billion from Chelsea soccer club owner Roman Abramovich.

DEAD AS A...

YUKOS , once Russia's flagship oil company, lost its prime production unit to state oil firm Rosneft last year after it was forced to auction it to cover punitive back tax bills, dealing a heavy blow to investor confidence.

Gref repeatedly warned about the damage the "YUKOS affair" was doing to Russia and also insisted that Gazprom did not need oil assets, saying it should focus on controlling costs in its core gas business.

"The point of view, that the state should broaden its presence in the economy and put certain branches under its guardianship is Neanderthal," Gref told an economic forum in the Black Sea town of Sochi.

"The Neanderthals died out and this ideology must die too," Interfax news agency quoted him as saying.

President Vladimir Putin's senior aides double up as the heads of state-controlled firms. The chairman of Gazprom, Dmitry Medvedev is also Putin's chief of staff. Rosneft chairman Igor Sechin is Putin's deputy chief of staff.

"It is clear there is a conflict of interest," said Kudrin. "The state fixes the rules of the game and at the same time is an actor in the economic sphere."