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Putin urges strict control over deals on privatization of state assets

November 22, 2016, 15:02 updated at: November 22, 2016, 17:40 UTC+3

The president admits that there are cases where public property is sold for a lower price than the market value that was originally declared

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© Artiom Korotaev/TASS

MOSCOW, November 22. /TASS/. Russia’s President Vladimir Putin has urged strict control over the deals on privatization of state assets.

"Of course it is still necessary to carry out control and to pay attention over such activities (privatization of state assets - TASS)," he said on Tuesday speaking at a forum of the All-Russian People Front.

Putin added that a closer study may reveal cases of abuse that took place in recent years.

The President admitted that there are cases where public property is sold for a lower price than the market value that was originally declared.

"The market value was determined six months ago, and then, when all procedures are done, it may fall," he said.

"This choice is always there: actually this is an economic an philosophical issue - whether to sell something on the falling market or to leave for the future. There are experts who believe that the goal of privatization is not only to get a fiscal result - to raise money for the budget as much as possible but to change the structure of the economy in the hope that, once in private hands, this property will start functioning better and eventually give the best effect, and the state will get a lot of money in the form of tax revenues," the head of state said.

Speaking about the sites for sale of state property, Putin recalled that earlier as part of every privatization deal the Federal Property Management Agency attracted a company to the competition.

"Ultimately, this led to the situation when the number of bankruptcies increased and preparations for the auctions were delayed for an unreasonably long time," he said. According to the President, this is why the government decided to appoint two agents for holding auctions.

"Should we go back to the old system? Anyway, let’s see how these two agents that were appointed by the government will fulfil their duties," he said.

Lending in real sector of economy

The president finds it very important to encourage banks to grant loans in the sector of real economy.

"Our task is to encourage financial institutions to lend to the real sector of the economy and citizens. To push them to do this, because today many experts believe that the volume of lending from financial institutions is not enough," he said on Tuesday speaking at a forum of the All-Russian People Front.

According to him, the question is whether to use administrative or economic tools for creation of favorable conditions for lending.

Putin recalled that in the US the crisis of mortgage lending occurred because banks provided unsecured mortgage loans.

"That created a huge financial pyramid that almost ruined the whole system in that sector of economy in the US and negatively affected the whole global economy, without any exaggeration," he said.

Сompetitive environment

The president has called on businessmen not to be afraid to create a competitive environment, and not to hide behind the counter sanctions.

"Of course, all producers in the country are interested that this situation (Russia’s restrictive measures in agriculture in response to Western sanctions) would continue as long as possible. But now I’ll say a totally unexpected and maybe even a criminal thing, in your opinion: the consumer is interested in getting goods of good quality at the lowest price, so we need to create a competitive environment," he said onTuesday speaking at a forum of the All-Russian People Front.

Putin said that although the number of consumers in Russia is much bigger than manufacturers, he knows that business is interested in maintaining the food embargo.

"I can whisper it in your ear: we will stretch it as long as possible," he joked noting that Russia has been able to fully take advantage of the situation created by the introduction of anti-Russian sanctions.

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