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Putin aide upbeat on Russian economy
By Patrick Lannin

MOSCOW, Oct 29 (Reuters) - President Vladimir Putin's top economic adviser told a meeting of business leaders on Monday that the Russian economy was giving its best performance for 10 years, but further steps were needed to make it a mature market economy.

Andrei Illarionov told a conference organised by the World Economic Forum, which arranges annual meetings of business and political leaders in the Swiss resort of Davos, that growth this year was expected at more than five percent.

He told the gathering that inflation would be higher than in the West, at 18-20 percent, but was on a downward trend. The meeting will be addressed by Putin on Tuesday.

"These numbers have brought Russia into the relatively thin ranks of a number of countries with big growth. The longest and deepest crisis is to a large extent over," he said.

"Now we are entering the other transition from an emerging market to a mature market," he said.

Illarionov said further changes were needed to streamline the bureacracy and repair a banking system which had not yet recovered from the financial crisis of 1998.

"We have quite a lot to do in all sectors, but we have entered on the road (of reform) and we are going to go along it," he added.

The meeting was attended by many leading firms including Unilever and ExxonMobil.

SECURITY CLAMPDOWN

The meeting was attended by economists and foreign and Russian businessmen and was held amid heavy precautions to prevent the violence which has disrupted similar gatherings in recent years.

Police said they had quickly moved away anyone attempting to stage a protest and that 13 people were detained. Some 1,500 policemen formed a cordon around the hotel where the meeting was held.

Those arrested were all members of an extreme nationalist group. Organisers had expected few protests following last month's attacks on the United States.

"Security measures were so tight that any attempt at disruption was quickly stopped," a police spokeswoman said.

REFORMS COULD PROTECT RUSSIA AGAINST SLOWDOWN

Jean Lemierre, the head of the European Bank for Reconstruction and Development (EBRD), in Moscow for the conference, endorsed Russia's progress and said it would protect it against global economic slowdown.

"Nobody in the world is immune from the slowdown, and Russia is not immune, of course," Lemierre told a news conference.

"The progress of reform that has been done in Russia is such that we at the EBRD think that the impact of the slowdown in the world economy would be very limited in Russia."

Russian Prime Minister Minister Mikhail Kasyanov told a separate conference on investment in Russia that he saw growth in households' real incomes of 6.5 percent in 2001 against five percent in 2000. He said economic successes were routine.

"Macroeconomic stability in Russia has become the usual thing -- inflation is falling, gold and foreign exchange reserves are growing, we have a solid budget surplus," Kasyanov said.

(Additional reporting by Anastia Styopina)

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