Stepashin spoke at an investment conference Monday organized by Renaissance Capital, Russia's leading investment group. He said the American economy's capitalization was $14 trillion by comparison.
If capitalization does improve, Russia will be able to join the G8 as a full-fledged member and economic growth will become sustainable, Stepashin said.
Capitalization would increase if Russian companies' assets were to be reevaluated. National assets have to be re-capitalized, he said.
"We must ensure that the Russian economy regains large-scale and has a proper role in the world," he said.
Stepashin said the 1990s privatization campaign had led to "the massive devaluation of national assets." No inventory of state enterprises was taken, and they were not evaluated at the beginning of the campaign.
"That's why enterprises were evaluated at random and huge portions of assets were transferred to offshore zones afterwards," he said.
Stepashin said national assets had to be reevaluated and returned from offshore zones, resulting in the resolving of the budget recharge problem.
He said the campaign had been designed to nurture the emergence of numerous private owners, but property was concentrated in the hands of a few "Russian citizens and foreigners."
Modern, western-type economies are based on new owners who create jobs Stepashin said.
"Russia, instead, got giant owners in the raw materials sector, while small businesses were set adrift, left to deal with criminal groups by themselves," he said.
He called the situation a roadblock left by the privatization campaign and that clearing it was essential for building a competitive economy.
Stepashin said assets in Russia were either not involved in economic turnover, or were not reported, which resulted in lower GDP figures.
