ST PETERSBURG, Russia (Reuters) - A senior Russian official tried on Sunday to allay foreign investors' worries about lawlessness and growing state control, pledging to reduce Moscow's role in the economy and to respect private property.
Foreign investors listed the weak rule of law, a lack of independent courts and corruption as their most serious concerns about Russia in a survey published last week by a government-run investment advisory council.
"We have to repeat again and again -- protection of property rights is the top and most important task of the state," First Deputy Prime Minister Igor Shuvalov told Russia's most important annual business conference in a keynote speech.
Several big Western multinationals have suffered legal challenges to aspects of their Russian operations, including BP's Russian venture TNK-BP, Telenor's partly-owned cellphone operator Vimpelcom and French retailer Auchan.
Promising to reduce the state's role in the economy, Shuvalov said Prime Minister Vladimir Putin had approved a decision to cut the number of strategic enterprises controlled by the state.
During Putin's 2000-2008 presidency, Russia's government returned large chunks of the oil industry to state control and also took over some banks, a titanium maker and a car company.
"We don't have a goal of increasing state involvement (in the economy) nor especially a goal of increasing the role of bureaucracy," Shuvalov told the St Petersburg Economic Forum.
Shuvalov, one of the leading liberals in Putin's administration, said the government would reform the way it ran Russia's big state-controlled corporations by rotating their boards of directors, replacing bureaucrats with professionals.
"We have serious plans in this regard," he said. "We will form them in a way that will make them absolutely transparent."
Recent events show how far there is to go.
Russia's top state-controlled oil company Rosneft> last week renewed its board, re-appointing Deputy Prime Minster Igor Sechin -- a close Putin ally -- as chairman and Kremlin chief of staff Sergei Naryshkin as deputy chairman.
Economists say Russia's shrinking population is a brake on growth and Shuvalov said the country had to become more attractive to live in, with better education and health services and more modern skills in its workforce.
Shuvalov repeated an aspiration set by Putin that Russia was set to become the world's sixth largest economy this year if figures were adjusted to equalize purchasing power.
In absolute terms, Russia is the world's 11th biggest economy, just behind Brazil, according to World Bank figures for 2006, the latest available on its website.
Jim O'Neill, the Goldman Sachs economist famous for predicting five years ago that Brazil, Russia, India and China would join the world's top economies by 2050 and giving them the collective name of "BRICs", said the main brake on Russia's growth to 2020 would be its declining population.
"Having a lot of people working is very important (for economic growth) and Russia has not got the same advantage as other BRICs," O'Neill told the forum.
He noted that over the next 12 years Russia's population was expected to fall slightly, while India would add another 300 million people -- more than twice Russia's present population.
O'Neill forecast Russia's economy would grow at 3.3 percent between 2010 and 2015 and at 2.9 percent from 2015-2020 -- more slowly than the 7-8 percent it has achieved in recent years -- although it would become richer on a per capita basis.
Additional reporting by Dmitry Zhdannikov; editing by Andrew Dobbie