* Govt adviser says inflation blocks anti-crisis effort
* Russia aims to modernise economy after crisis
* Renewed growth in commodity prices may stall reforms
By Gleb Bryanski
MOSCOW, April 17 (Reuters) - High inflation is crippling Russia's arsenal for combating its first recession in a decade, posing the biggest obstacle to modernising the economy once the crisis is over, a senior government expert said on Friday. Faced with its worst economic plight in a decade, the government created last year an anti-crisis taskforce headed by First Deputy Prime Minister Igor Shuvalov, who sought advice from a council of the country's top economists.
"I believe that the ultimate goal of the government is not only the anti-crisis policy measures but the post-crisis modernisation of the economy," said Vladimir Mau, head of the Experts' Council.
"The two fundamental problems here are inflation and monopolisation," Mau told Reuters in an interview, adding that unemployment was seen as a close third.
Consumer prices in Russia have risen 5.8 percent so far this year and the government expects inflation for 2009 as a whole of about 13 percent, little changed from 13.3 percent last year.
Mau said the experts were mystified why inflation was still high despite a stable exchange rate in recent weeks and a fall in commodity prices. He said the only explanation could be that inflationary expectations are deeply embedded in society.
"Inflation limits the tools of our anti-crisis policy. Many measures used in the U.S. and Europe are not available for us. We cannot carry out quantitative easing, we cannot use budget stimulus and we need to maintain high interest rates," he said.
MODERNISATION
Mau fears that renewed growth in commodity prices could stall the modernisation drive and bring the government back into a complacency mode that characterised the last years of Vladimir Putin's presidency.
"During an economic boom it is impossible to carry out a modernisation policy," he said. "If prices for oil and gas are high, there will be no diversification."
Modernisation, according to Mau, entails the diversification of the economy, higher growth in non-commodity sectors and a gradual diversification of exports -- goals that were much talked about in recent years with little evident outcome.
Restructuring of the banking sector, making the rouble a regional reserve currency, social policy, the pension system and budget reforms are the top themes discussed by the council.
The experts favour the recapitalisation of banks through the issuance of government securities as a means to fend off a bad loan crisis rather than creation of a "bad bank" because asset valuation poses a moral hazard problem.
"We believe that we should not create a special agency and buy out enterprises' debts, but give the banks a possibility to increase their capital and create incentives for them to sort out their bad debt problems," Mau said.
INTELLECTUAL CHALLENGE
Mau said it was not yet clear whether firms' debt payments delays were caused by temporary liquidity problems or a lack of demand for their goods, making it hard for banks to tell which companies would make reliable borrowers in the future.
"A resumption of loans to domestic enterprises is a long and delicate process. I would not apply any pressure on banks," he said.
He added that the situation with corporate foreign debt had improved a lot since the government decided to stop a state debt refinancing lifeline, forcing firms and their creditors to the negotiating table.
With depressed global stock markets, creditors are unlikely to want to seize the collateral as its resale value is low, and thus mass defaults can probably be avoided, he said.
The crisis poses the biggest intellectual challenge for economists since the post-communist transition in Russia, but Mau said there are few ideological differences between mainstream experts.
"I also find it difficult to name any obvious failures in the Russian leadership's handling of the crisis after a rather chaotic reaction in the first weeks ... aimed at supporting the domestic stock market," he said. (Editing by Stephen Nisbet)