- The Washington Times - Tuesday, December 27, 2005

MOSCOW (AP) — An outspoken economic adviser to President Vladimir Putin said yesterday he had offered his resignation, saying he could no longer work in a government that had eliminated political freedoms.

Andrei Illarionov, the lone dissenter in a Kremlin dominated by Mr. Putin’s fellow KGB veterans, was stripped of his duties as envoy to the Group of Eight leading industrialized nations earlier this year. However, he had remained Mr. Putin’s economic adviser.

Mr. Illarionov made the move after criticizing the Kremlin’s course last week, when he said that political freedom in Russia has declined and that government-controlled corporations have stifled competition and ignored public interests.

“It is one thing to work in a partly free country, which Russia was six years ago. It is quite another when the country has ceased to be politically free,” he said yesterday, according to the ITAR-Tass news agency.

Mr. Illarionov, who also has criticized what he says is a return to inefficient state control of the economy, complained that he was no longer able to speak his mind.

“I considered it important to remain here at this post as long as I had the possibility to do something, including speaking out,” he said, according to ITAR-Tass. “Until recently, no one put any restrictions on me expressing my point of view. Now the situation has changed.”

Mr. Illarionov, 44, a liberal economist, had worked in the Russian government in the 1990s and became Mr. Putin’s adviser in 2000.

Viktor Chernomyrdin, a longtime Russian prime minister who is now ambassador to Ukraine, said Mr. Illarionov’s criticism of the government was unfounded.

“There was so much malice in him; he was being overly negative,” Mr. Chernomyrdin said, according to the Interfax news agency. “It was a mistake to keep him in the Kremlin for so long.”

But Yevgeny Ikhlov, who leads the group For Human Rights, described Mr. Illarionov as “the last liberal in the government” who dared to expose the authorities’ crackdown on political freedoms.

Mr. Illarionov increasingly fell out of favor after he became a vocal critic of moves to restore state control over the strategic energy sector, in particular lambasting the effective nationalization of the Yukos oil empire of jailed tycoon Mikhail Khodorkovsky in 2004 as the “swindle of the year.”

Mr. Illarionov said he had several reasons for his decision to resign but that his main concern was the development of an increasingly state-controlled economy, with major public companies run by self-interested bureaucrats.

“Six years ago when I came to this post, I dedicated my work to increasing economic freedoms in Russia. Six years on, the situation has changed radically,” he said.

“This is a state model with the participation of state corporations, which although they are public in name and status, are managed above all for their own personal interests,” Mr. Illarionov said.

Russia’s biggest automaker, Avtovaz, last week elected a new board with top managers representing the state, cementing control of a key company after parallel moves to increase the state’s hold on the energy sector.

Under Mr. Putin, Russia has moved to snap up chunks of the strategically important oil sector. The state now controls about 30 percent of the national oil industry.

Last December, the biggest oil fields of Yukos — once Russia’s No. 1 producer — were transferred to the state to reclaim billions of dollars in disputed tax bills. This year, the giant gas monopoly Gazprom bought the privately held OAO Sibneft oil company.

Mr. Illarionov said last week that after state-owned Rosneft took over OAO Yukos’ main subsidiary, Yuganskneftegaz, the unit’s revenues dropped and costs soared.

The announcement of the adviser’s resignation brought no response from Mr. Putin.

Also yesterday, the Russian parliament gave final approval to legislation that will impose strict curbs on human rights and other nonprofit groups.

Critics say it is another step by Mr. Putin to tighten control of society after moves to put the state in charge of all national broadcasters, impose a Kremlin-loyal parliament and end the direct election of governors in Russia’s sprawling regions in favor of officials effectively appointed from Moscow.

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