The process of strengthening the state’s role in the economy has switched gears, as the state is no longer simply setting the rules of engagement, but attempting to regulate the whole economic system of the country, the Federal Anti-Monopoly Service (FAS) watchdog warned in a report on competition in 2018.  

The new trends are evident at both federal and regional levels, where authorities are interfering in local business relations and engaging in regional protectionism, the report said.

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The FAS said that before the 1998 crisis the state’s share of the economy was estimated at about 25 percent, rising to 40-45 percent by 2008 and exceeding 50 percent by 2013. The FAS estimates that in 2017-2018 the state’s share of the economy already exceeds 60-70 percent of GDP. The FAS’s estimates are controversial and remain a subject of debate among economists.

“In many regions we see what I would call economic feudalism, in which there is no private sector, no capitalistic relations, but vassals and lords — the state apparatus, which meddles in private business affairs,” the Vedomosti daily quoted FAS head Igor Artemyev as saying in October 2018.

Analysts surveyed by Vedomosti said that the state intervenes into specific markets so often, as in the case of direct regulation of fuel prices, that it would be unreasonable to expect the companies themselves to refrain from coordination and tacit collusions.