In April, Russia will begin to sell state property worth 100 billion rubles, to private individuals and companies.
The sell-off has become necessary to partially cover the big hole in the state coffers. For the first time in several years, the budget for this fiscal year is with a deficit. Second, there is too much government involvement in the Russian economy, believes Oleg Pyatenko, head of the Economic-Law School: "Privatization is both sensible and correct because the State has less business acumen than the individual. In the whole world, state property is more badly managed than private ones, in keeping with the generally accepted belief that government business is nobody's business".
Under the ongoing global crisis, control over state property in Russia leaves much to be desired, a fact recognized by officials at all levels. Effective management of the people's property is impossible because from the point of view of economic development, selling off the state property would be preferable, since the property put on sale could bring in foreign business, making the country more investment attractive, one of the strategic tasks of the economic development of Russia, which have repeatеdly been talked about by the country's leaders.
Intelligent and effective private property owners should be encouraged to participate in the fresh round of privatization, advised Anatoly Aksakov, member of the State Duma's Financial Market committee:
"Property to be put on sale should be sold at market prices, although money is hard to come by at the present time. It would be better to sell when demand is at its peak. Foreign investors should be allowed to take part in the Russian privatization exercise, but maximum care is called for," cautioned Aksakov.
On the whole, foreign investors are better managers and can organize business in such a way as to turn a loss-making business into a profit-making one in a short period of time. Russian businessmen should participate in privatization alongside their foreign counterparts, to understudy them. The global crisis has cheapened the value of assets, but they will become expensive after the crisis, meaning that the calculating businessman will reap huge profits on investments at the end.
About a thousand lots of state property will be up for grab by private businessmen, and to reduce the risk of corruption, the largest property will be sold not by the Russian Property Agency, but by the Institute of Independent Consultants from Investbanks. Transport infrastructure, Sea and River ports, shipping and airports are expected to be among items to be auctioned off. Investors can own from 20 per cent to 46 per cent of the shares of each item, but the state will retain the lion's share of the Novorossiysk and Murmansk ports equity. The Russian State Insurance company and the Moscow Construction firm are among objects that the state wants to rid itself off this year.
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