Economic indicators like credit ratings and Central Bank reserves may rise, he said, but they are not helping to modernize society.

Yavlinsky, an economist by training, established himself as a leading democrat after entering politics in the early 1990s. One-fourth of the population enjoys an "average, modern standard of living," he said, while the remaining three-fourths falls short of that.

Europe's middle class is made up of "teachers, doctors, engineers, managers," he said, while Russia's is "a very narrow circle of people providing specialized services -- restaurants, taxis, girls."

Russia has a capitalist economy that, unlike its Soviet predecessor, is tied to world markets, he said, explaining the book's title, but that exists "on the most distant margins." Yavlinsky said that the oligarchic economic system "has no future from the medium- and long-term point of view."

"We used to have Gosplan," the state central planning agency, he said. "Now we have Gosklan. What's the difference? In substance, nothing has changed."

Less than 150 people make all key decisions in the country, and ultimately "all businesses, parliament, the media and the courts are controlled by one person," he said, in reference to President Vladimir Putin.

One "exceptionally important" weakness of the system is that property rights "are not unconditional," he said. "Nothing is guaranteed to anyone."

Without a dismantling of the oligarchic system, in which, he said, 20-30 top business structures control 70 percent of the economy, the country will eventually lose what it has gained through "deep demodernization."

Yavlinsky is the author of some 60 books and articles, his web site says. His previous books include "Russia's Phony Capitalism," published in 1998, and "Demodernization," published in 2002.

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The Moscow Times, February 11, 2004