Privatization in Russia

Privatization in Russia is the process of transferring state property and municipal property in the Russian Federation to private ownership, which has been carried out in Russia since the early 1990s (after the collapse of the USSR).

Privatization is usually associated with the names of Yegor Gaidar and Anatoly Chubais, who were involved in the privatization of industrial enterprises in the 1990s, the results of which are often sharply criticized - in particular, due to the emergence of a strong economic stratification of the Russian population.

At the same time, in addition to industrial enterprises, other assets were privatized - agricultural enterprises (collective farms and state farms), land (of various types of purposes) and housing. The results of privatization in these areas were out of the zone of public attention and were not subjected to any systematic analysis and rethinking.

Nationalization in Russia

Main article: Nationalization in Russia

Chronicle

2023

The increase in budget revenues from privatization in Russia by 3.5 times - data from the Accounts Chamber

On June 14, 2024, it became known that the budget revenues of the Russian Federation from the privatization of federal property in 2023 amounted to 27.3 billion rubles, which exceeded the forecast figures by 18.2 times. This is evidenced by the data of the Accounts Chamber.

Compared to 2022, revenues from privatization in the Russian Federation increased 3.5 times. In 2023, revenues from the use of federal property excluding dividends reached 29.8 billion rubles, which is 175% higher than planned, according to the Federal Property Management Agency.

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Freepik

As noted by TASS, the growth in income is explained by the active involvement of federal property in the economic turnover. In particular, in 2023, 4.518 thousand land plots and 709 objects of property of the treasury were leased. The Federal Property Management Agency emphasized that revenues from the use of federal property have been growing over the past three years and increased by more than a third compared to 2021.

According to representatives of the Federal Property Management Agency, in total in 2023 the department transferred 370.2 billion rubles to the budget, which amounted to 80.5% of the forecast indicators. The volume of accounts receivable of the Federal Property Management Agency decreased by 10.4%, reaching 663.2 billion rubles, but overdue debt increased by 29.7%, amounting to 21.4 billion rubles.

According to TASS, the incomplete implementation of the planned indicators for income is due to government decisions on individual business companies on non-payment of dividends for 2022, as well as a decrease in the net profit of these companies.

Expenses of the Federal Property Management Agency in 2023 amounted to 8.4 billion rubles, which corresponds to 99.98% of the planned indicators. According to the results of the audit, the Accounts Chamber recognized the budget statements of the Federal Property Management Agency for 2023 as reliable, TASS reports.^[1]

Receipt of 28.9 billion rubles to the budget instead of a plan for 1.8 billion rubles

The Russian budget for 2023 received 28.9 billion rubles from privatization instead of a plan for 1.8 billion rubles. The Federal Property Management Agency told about this at the end of December 2023.

Thus, the plan for revenues from privatization is 16 times overfulfilled. It is expected that in 2024 1.6 billion rubles will come to the budget from privatization, in 2025 - 1.5 billion rubles. In addition, the Federal Property Management Agency reported that by the end of 2023, 1.8 billion rubles from the sale of corruption property will be credited to the budget of the Pension and Social Insurance Fund.

The Russian budget for 2023 received 28.9 billion rubles from privatization

Vitaly Aristarkhov, head of the investment consulting and evaluation department of the audit and consulting network FinExpertiza, in a conversation with Izvestia, suggested that two major transactions influenced the high privatization rates in 2023: the sale in St. Petersburg of the Phoenix company, which manages the port of Bronka, and the sale of shares of the Kuchuksulfat enterprise in the Altai Territory. Each of them was estimated at more than 10 billion rubles, the expert said.

In December 2023, the head of Sberbank German Gref said that most of the companies with state participation in Russia can be privatized. According to him, 25% is enough for the state to control the bank. If the government decides to give 25% for privatization, this will increase the investment attractiveness of the Russian market, the banker said.

According to Vitaly Aristarkhov, a certain share in such enterprises could be privatized without losing state control. This applies to companies such as Sber, Tatneft, Alrosa, Russian Railways, RusHydro and others. The transfer to private ownership of moderate packages of the largest companies would contribute not only to filling the budget, but also to improving the investment climate, the expert is sure.^[2]

2021:6 billion rubles from privatization to the budget

Thanks to privatization, the Russian budget in 2021 was replenished by about 6 billion rubles, which the head of the Federal Property Management Agency Vadim Yakovenko spoke about in May 2022.

He recalled that the Government of the Russian Federation made an important decision to synchronize the forecast privatization plan with the budget law.

Privatization brought 6 billion rubles to the Russian budget per year

{{quote 'In accordance with your order, Mikhail Vladimirovich, two bills were prepared and have already passed in the first reading in the State Duma. The first concerns the introduction of an additional possibility of special law. Thus, we will be able to control in the post-privatization period those companies that were implemented with investment conditions, "Yakovenko added. }} Artem Kiryanov, deputy chairman of the State Duma Committee on Economic Policy, believes that the privatization process is useful for the Russian economy. Privatization is related to providing the business with the necessary assets. Therefore, there are no signals that would require an urgent end to the privatization process, he said in May 2022.^[3]

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