Moscow, 3 October: The creation of state sector corporations will lead to a slowdown in Russia's economic growth, says Arkadiy Dvorkovich, head of the (Russian) president's expert department.

"I consider the fashion for state sector corporations, which are supposed to be created, to be extremely dangerous," he said on Wednesday (3 October) at the third annual major business forum in Moscow.

Dvorkovich said that state corporations should offer public services, and the creation of such corporations as the Development Bank and the Deposit Insurance Agency meets this need.

"But when as a simple solution to issues it is proposed that corporations such as ones for the provision of medicines, roads, fishing - I could list them further at length - are created this suggests that the government has not even tried to understand that private business could do this," he said.

"This is the way for the growth of the Russian economy to revert to zero," he said.

Dvorkovich added that "we either have a scenario in which state corporations prevail, receiving various concessions, such as tax, customs, and for buying up land". "Or we will have a system where private companies prevail that have no concessions, where there will be low taxes and the state will fulfil its functions of defending property rights and reducing administrative costs," Dvorkovich said. He added that instead of the latter "we see the all-consuming fashion of the state conquering the market through state corporations".

Dvorkovich said that "most people that run the state" do understand that one needs to develop according to the second scenario, when it is precisely private initiative that develops. "But there are also risks," he said.