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Russia's privatisation of 1990s followed the worst possible scenario

February 17, 2012, 8:48 UTC+3
Head of Russia’s Accounting Chamber Sergei Stepashin says that the objective declared during the privatisation of the 1990s was not achieved
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MOSCOW, February 17 (Itar-Tass) —— Head of Russia’s Accounting Chamber Sergei Stepashin says that the objective declared during the privatisation of the 1990s was not achieved.

“Having analysed results of the privatisation, we said clearly and honestly: it followed the worst scenario out of all the European countries. Here I am quoting a member of the expert group, which worked together with the Accounting Chamber, a Nobel Prize winner, American Professor Joseph Stiglitz...” he said in an interview with the Rossiiskaya Gazeta daily, which was published on Friday. “Clearly, the declared objective was not met. It was not only the transfer for market economy, but also formation of the middle class, establishment of effective enterprises, which could compete with the Western companies. Thus, over 60 percent of the industrial potential of the country was left out, many of the companies went bankrupt and lost the engineering staff. The Soviet economy, which ranked second in the world, slump about a hundred positions down.”

He added that the loans-for-shares auctions were “clearly a half-roguish, where people borrowed money from banks, bought major enterprises for no money, and sometimes even did not pay back the loan.”

However, “we have made another important step: the mass privatisation and even the loans-for-shares auctions are legitimate de jure.” Thus, “speaking about de-privatisation is not correct from the legal point of view.”

“The most important thing now is that we put a full stop in the privatisation of the 90s. We have to tell the truth about what happened then, and to approach accurately the future privatisation,” he continued. “We were about to hurry regarding several objects, for example, Transneft or Zarubezhneft. The market competition should feature various forms of property.”

 

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