Russian government should vest more power to regions - Prokhorov

Russian businessman Mikhail Prokhorov called on Friday for a redistribution of powers between the federal government and regional administrations as the current model has been "exhausted."

"Our current model of governance was effective for the past ten years, but has now been exhausted," Prokhorov said during a working breakfast at the St Petersburg Economic Forum. "I think we need to redistribute powers among the federal center and the regions."

The businessman also named increased labor activity as an effective measure for diversifying Russia's economy away from its dependence on energy resources.

"An all-embracing increase in labor productivity should be a major priority," Prokhorov said. "This is the only condition we need to provide wealth to our citizens, instead of the redistribution of oil and gas revenues."

Prokhorov, the president of private investment fund Onexim Group, is Russia's third richest man with an estimated wealth of $18 billion. He has recently taken interest in politics and will be confirmed as the leader of pro-Kremlin Right Cause political party on June 25.

The Right Cause was founded in late 2008 as a merger of the liberal Union of Rightist Forces, Civic Power, and the Democratic Party of Russia and is widely seen as a Kremlin project to create a semblance of a multi-party political system in Russia.