“It’s time to let the economy mature.” Alexey Kudrin proposed to privatize state-owned companies
The head of the Accounts Chamber, former RF Finance Minister Alexei Kudrin wrote an article for the “Company” magazine “It’s time to let the economy grow up”, in which he proposed to reduce the participation of the state in the Russian economy.
The public sector can play an important and positive role at times, but it is time for it to start shrinking. There is no “special way” in this situation – state-owned companies rarely become economic and innovative drivers.
Kudrin noted that among the 10 largest companies in Russia, only four are private, while in the ten largest companies in the United States, all. According to him, state-owned companies are “less flexible in terms of management” and are highly dependent on the bureaucratic machine.
The situation can be changed by privatization, which will give enterprises effective owners. This will have a positive effect not only on the results of individual organizations, but will also increase the efficiency of the economy as a whole.
Kudrin warned against the so-called pseudo-privatization, when part of the block of shares owned by the state is made as a contribution to the authorized capital of state corporations or development institutions.
The head of the Accounts Chamber believes that privatization will allow attracting additional funds for new strategic initiatives without increasing the tax burden. According to Kudrin’s estimates, privatization can bring to the treasury on average about 200-300 billion rubles a year for five to six years.
Kudrin called it a “good target” to keep no more than 160 blocks of shares in state ownership. He believes that the state needs to get out “from the economic sectors living in the market conditions”, but to remain “only where it is necessary – in the security, social sphere.”
According to the Unified State Property Management System, which was cited by Alexey Kudrin, as of July 16, 2021, the state owned shares in 752 joint-stock companies and 496 FSUEs.