The Kremlin is not discussing the possibility of resuming privatization in Russia. According to RBC, this was stated by the press secretary of the President Dmitry Peskov.
Commenting on the proposal of the head of VTB Andrey Kostin on a new stage of privatization in Russia, Peskov said that “all economists and experts are discussing various topics related to accelerating the country’s economic development in the conditions in which we are now.”
The Kremlin spokesman called the point of view voiced by Kostin interesting, noting that “after all, he heads the second largest bank in Russia.” “And over the course of more than one decade, he has gained enormous authority in the banking sector and as an economist too,” Peskov said.
Kostin, in a column for RBC, wrote that a new economic model, which has suffered due to Western sanctions, can be built by starting with three priorities: new logistics corridors, restarting entire industries, and strengthening the country’s defense capability. It is possible to attract money for these purposes through a new stage of privatization, an increase in public debt and the distribution of the state budget based on priorities.
According to the head of VTB, privatization has proven its effectiveness more than once, and its resumption will allow attracting money to the budget on market terms and “will give a powerful impetus to clearing those bottlenecks where the willingness to take risks is especially important today.” He attributed competition to the advantages of privatization, which he called an important condition for the “healthy functioning of the economy”, as well as strengthening the foundations of market mechanisms, developing the stock market and “forming a new generation of managers.”
Kostin said that the difference between the current level (about 17% of GDP) and the “problematic” threshold (more than 60%) of public debt “creates a huge margin of safety.” In his opinion, without significant risks to financial stability, the economy can additionally receive about 70 trillion rubles, including through the active participation of the largest banks in the purchase of federal loan bonds.
In February 2021, Russian President Vladimir Putin called it unacceptable to reduce the share of state-owned companies in the market for the sake of the process itself, “especially as it was done in the 1990s.” According to him, enterprises should be transferred to private hands so that the structure of the economy improves, and any step in this direction should create an effective owner.
Source: Rosbalt
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