The Russian economy remains “retarded” and “quasi-feudal,” especially in less developed region, the head of the Federal Anti-monopoly Service (FAS) Igor Artemyev said in an interview to Kommersant daily, adding that the influence of the state in the economy has only strengthened under Western sanctions.

FAS watchdog has long argued that the state itself is the main impediment to Russia's competitiveness and urged to limit the market share of state-controlled and municipal companies and their new acquisitions.

"This is the peculiarity of creating a state-monopoly capitalism, of fusing the authorities and business," Artemyev told Kommersant. "This is the disease we have for a long time."

Artemyev is one of the quiet voices of reason in the government infrastructure, in charge of enforcing anti-trust legislation that Russian companies take surprisingly seriously. While the stoligarch, or state sponsored oligarchs, that surround president Vladimir Putin seem to be exempt, the rest of Russian business has to take FAS seriously as its decisions are enforced. For example, X5 Retail Group has been forced to sell off some of its supermarkets in some regions where it broached the monopolistic caps on local market shares set up by FAS.

According to FAS estimates, state-owned companies already accounted for about 70% of GDP in 2015. Other estimates put the state's share in the economy at 40-50%. 

In 2017 the agency proposed developing a programme for selling existing core assets of inefficient companies, with reforms advised in the healthcare sector, road building, agriculture, and utilities.

However, since 2017 the government and the Ministry of Economic Development has been consistently cutting the privatisation plans, while the new economic growth paradigm announced by President Vladimir Putin for his 2018-2024 term largely focuses on state-driven infrastructure investment.

Artemyev believes that the state influence has grown the most in the banking sector and manufacturing, arguing that this process intensifies in direct proportion to the duration of sanctions against Russia.

The FAS head noted competitiveness advances in the communication sector, where recently domestic roaming charges have been lifted and subscribers are now allowed to keep their numbers when migrating between the providers.

At the same time Artemyev is sceptical that state digitisation drive will make procurement and buying procedures for state companies more transparent. "The situation there, it seems, will only worsen."