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“The choice for Russia is clear cut,” Aven told delegates at the 5th Annual Economic Forum. “Slow growth without upheaval and lagging behind the rest of the world or reform and liberalisation of the natural monopolies. Reform is a must.”

Aven, a former Russian Minister of Foreign Economic Relations, said Russia had made great strides since the 1998 financial crisis and was now experiencing sustainable recovery.

Russia and China led the world in GDP growth in 2001, he said, and Russia now had a fiscal surplus and a positive trade balance.

But the danger was that growth could slow unless Russia undertook far-reaching reform.

“Russia still does not have a liberal economy,” said Aven citing a bloated state payroll, the state control of pensions, continued substantial state involvement in the banking sector, and the natural monopolies such as Gazprom.

He said the reform catalysts must come in the banking, energy and pension sectors.

Banking reform, in particular, was essential to encourage both domestic and foreign investment and put to work the US $30 billion “under the mattress” in Russia.

Some 1,200 politicians, diplomats, bankers and businessmen were attending the two-day forum with a top line of prominent business and political speakers from both countries. Other speakers sharing the platform with Aven on the opening day included Patricia Hewitt, British Secretary of State for Trade and Industry, Alexei Kudrin, Russian Deputy Prime Minister and Finance Minister, Simon Kukes, President of Tyumen Oil Company and Philip Watts, Chairman Royal Dutch Shell.

Aven delivered a similar speech in Washington earlier in the week at the US-Russia Business Council.