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. Last Updated: 07/27/2016

Illarionov Scolds West for Accepting Russia in G8

Western governments are endorsing a death of political freedoms under President Vladimir Putin and sending a signal of approval to dictators the world over by accepting Russia as the leader of the Group of Eight this year, said former presidential adviser Andrei Illarionov.

"Russia is a member of a totally different club compared to the G7 countries," Illarionov said in an interview last week with journalists. By attending the G8 summit this July in St. Petersburg, Western leaders will be giving a strong stamp of approval to policies that include "the nationalization of private property, destruction of the rule of law, violation of human rights and liquidation of democracy," he said.

The leaders of authoritarian nations will see this backing as proof that it is necessary only to have a strong state and energy resources to be accepted into a club that has been built on the principles of democracy and market freedoms, he said. "This is the biggest endorsement of this approach. ... It will be a great triumph for dictators the world over," he said.

Western commercial institutions also have played a role in the Kremlin's dismantling of market freedoms, in large part through their work in support of state oil company Rosneft, he said.

Illarionov's comments on Friday came at the end of two days of talks in Moscow among G8 ministers on energy security, which Russia has put at the top of the agenda for its G8 presidency.

Under Putin, Russia has become the world's biggest exporter of energy at a time of soaring prices and demand.

Also under Putin, Russia has become politically unfree, according to annual ratings put together by Freedom House, a U.S. nongovernmental organization. Russia is the only country in Europe apart from Belarus to be judged politically unfree, which puts it alongside the likes of Egypt, Rwanda, Libya and Afghanistan, he said. "This is extraordinary for such a country," Illarionov said.

Russia is in a different category from its fellow G8 members in terms of economic indicators, too. On average, G7 countries have a gross domestic product per capita of $31,000, while Russia's is just $10,000, according to a new study by Illarionov's Institute of Economic Analysis. And while average consumer price index inflation in G7 countries is just 1.8 percent, in Russia it is 14.6 percent, the study says.

As part of its drive to consolidate power, Putin's Kremlin jailed Mikhail Khodorkovsky, the owner of the nation's biggest oil major, who was seen to pose a political threat. When the state moved on from its partial takeover of Khodorkovsky's Yukos into other sectors of the economy, Illarionov quit his post as presidential adviser late last year.

As one example of Western participation in the dismantling of market freedoms, he cited a recent filing in a Moscow court by Western banks led by Societe Generale for Yukos to be declared bankrupt. "It is very clear that this was done at the request of Rosneft," he said. Last week, Yukos said Rosneft had agreed in December to buy the $482 million outstanding on a $1 billion loan owed by Yukos to the banks.

Other cases were the involvement of Dresdner Bank in evaluating Yukos' main production unit, Yuganskneftegaz, for auction and the appointment of former German Chancellor Gerhard Schr?der to head the board of Gazprom's North European gas pipeline project, he said.

These Western companies "are actually building long-term relations with those forces in Russia that are destroying the very pillars of modern society: a market economy, respect for private property, democracy," he said. "That makes the situation much more difficult. Now people can say it is OK. These people have received Western approval and Western support."

The main aim of the planned initial public offering of Rosneft, which took over Yugansk, is to win Western acceptance of the state's takeover of Yukos, he said. "It is very important to have a Western stamp of approval for this business ... especially in the form of potentially millions of shareholders in Rosneft," he said.

"The main mission is to legalize the questionably acquired property. This is not some kind of nationalization. It is quasi-nationalization. It is the use of government bodies and government legislation to appropriate assets that have been taken from one private company and given to some particular people," he said.