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Presidential advisor Illarionov criticizes Russian government

MOSCOW, September 13 (RIA Novosti) - Vladimir Putin's economic advisor criticized the Russian government Tuesday for conducting policies that, in his view, were leading to a slow down in economic growth.

Andrei Illarionov told an investment forum in Moscow: "Economic growth rates [in Russia] have fallen due to the government's structural policy."

According to Illarionov, GDP had been growing at 6.8% a year for the last five years, but the growth rate has fallen to 5.6% in 2005. Industrial production has dropped from 6.6% to 4.1%, and the oil production growth rate is down from 8.5% to 2.5%, the advisor said.

He also said the government's structural policy had led to an increased tax burden for oil companies, higher state investment, increased import duties and the imposition of import quotas.

In addition, he said Russia was developing the "Venezuelan disease," referring to the fall in economic growth that country experienced after nationalizing its oil industry in the 1950s.

"Russia is also increasing the state share in large companies," he said. "As a result, private investment has fallen by 20%."

The advisor also said the government's policy had led to increased capital outflow. According to Illarionov, capital export from Russia reached $11 billion in 2001, but is expected to hit $34 billion in 2005.