Russia needs political competition - key reformer

ST PETERSBURG, Russia, June 8 (Reuters) - A leading architect of Russia's economic transition from the Soviet Union said on Sunday that without political competition, President Dmitry Medvedev's reforms could not be properly implemented. Anatoly Chubais, one of Russia's main supporters of market- friendly reforms, warned that officials could distort markets and create major problems if they were left unaccountable.

In a speech to officials and investors about a reform plan set out earlier by First Deputy Prime Minister Igor Shuvalov, Chubais said that without proper feedback and political competition Russia's state risked being completely ineffective.

"There is a political component here and we must discuss this," Chubais said at an investor forum in Russia's former imperial capital of St Petersburg.

"We must rate the state from the point of view of quality of service, the quality of the services provided, which are provided in the economy and the country as a whole. Governor, minister, government, president."

"A rating of the quality of this service is impossible without real feedback and without a really competitive political mechanism."

Medvedev, a former lawyer, was sworn in as president last month after winning a landslide election victory in March. Critics said the Kremlin tilted the playing field so far in Medvedev's favour that opposition candidates had no chance.

Under the 2000-2008 presidency of Vladimir Putin, who now serves as prime minister, Western governments say media freedoms were undermined and a political system constructed which is dominated by the Kremlin and the ruling party, United Russia.

Public criticism of the president is very rare in Russia.

Chubais is also head of the Russia's United Energy System EESR.MM electricity firm that is soon set to give way to a web of privatised spin-offs after a massive Kremlin-backed reform that has attracted billions in foreign investment.

It is unclear what Chubais, 52, will do after UES ceases to exist.

"If we are seriously speaking about... strengthening the presence of the state then there must also be a strengthening of feedback," said Chubais, who once served as former President Boris Yeltsin's chief of staff.

"In our country such a presence can be very effective but also completely ineffective and actually destructive. And in our history we have been pulled more in the second way than the first," he said.

Chubais is blamed by many in Russia for allowing a small group of tycoons to enrich themselves in the privatisations of the 1990s while millions of Russians were left in poverty amid economic collapse and crisis.

He concluded his speech by saying: "Long live the new economic liberalism." (Writing by Guy Faulconbridge, editing by Ibon Villelabeitia)