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. Last Updated: 07/27/2016

Kremlin Adviser Says Russia Is Vital to G8

VedomostiIgor Shuvalov
A senior Kremlin adviser denied that leaders of the Group of Eight objected to having Russia in their ranks, and said that Moscow was vital to the other seven members for guaranteeing the stability of economic development.

Igor Shuvalov, President Vladimir Putin's G8 liaison, told reporters late Wednesday that although Russia was only the 16th-largest economy in the world, its role as a top energy producer made it an "absolutely necessary partner."

Russia will soon be producing a half-billion metric tons of oil each year, he said.

The G8 comprises the world's seven wealthiest countries and Russia.

"We are as necessary to the G7 as they are to us," Shuvalov said, adding that Russia needed the other members' help in diversifying its economy away from its excessive reliance on energy exports.

Some members of the U.S. Congress have proposed excluding Russia from the G8 for backtracking on democracy, but Shuvalov said G8 leaders were united in their desire to preserve Russia's membership. The leaders have their differences, he said, "But in general, their attitudes toward our country and our president are very positive."

The Group of Seven industrialized countries turned down a U.S. proposal to invite Russia to join as a full member in 1992 -- a proposal made as a political gesture to encourage democracy in Russia -- but accepted Russia's full-fledged membership a decade later. Next year it assumes the presidency, and it will host the G8 summit next summer in the St. Petersburg region.

Still, Russia's status has always been different from that of the other members -- the United States, Britain, Canada, France, Germany, Japan and Italy -- since it has only recently been a recipient rather than donor of international aid, and about one-fifth of the population lives under the officially recognized poverty line. Moscow has also faced questions over its commitment to democracy as well as the free market.

Shuvalov said that in order to shore up its reputation, Russia must "try not to allow situations analogous" to the case of Yukos, which was carved up in the wake of crippling unpaid tax bills and a criminal case against its founder, Mikhail Khodorkovsky.

He said Russia had to do more to persuade investors that they would be free from government interference, and that it would be a long time before the Kremlin saw results in its fight against corruption.

"I frankly don't see any successful work by the authorities against corruption that will lead to tangible results within the next year. It's very difficult, painstaking work, slated to take, say, decades," Shuvalov said.

As an example, he said that Russians spend some $7 billion every year on bribes to get their children into university -- despite the government spending more on education than on any other social sphere.

Earlier this month, the Organization for Economic Cooperation and Development said that any structural reform would be virtually useless if Russia could not combat corruption.

Shuvalov alluded to long-running, sometimes bitter debates inside the Cabinet over the best way to meet Putin's ambitious goal of doubling the country's gross domestic product by 2010, and said that he saw greater danger in letting inflation grow than in allowing economic growth to slow -- putting him at odds with Prime Minister Mikhail Fradkov, who is seen to favor increased spending as a quick-fix means to achieving growth.

Shuvalov said the government would devote more attention to people-oriented services. He said that by the end of the year it would come to an agreement on how to modernize housing, health and education so that Russians could feel their country's economic improvement instead of seeing revenues devoted to intangible investment.

"People say 'We want to live now, give us money,'" Shuvalov said.