The Financial Times: «Medvedev seeks to curb state companies»
Dmitry Medvedev, Russia's president, on Wednesday called for sweeping curbs on state corporations that control swathes of the economy, declaring that many should be closed.
Without naming specific companies, he told a meeting of Russian business leaders at the Kremlin that the corporations should "simply disappear" or become joint stock companies, with many of their state privileges removed. "I think that at some moment the creation of state corporations got out of control," Mr Medvedev said.
His proposal could spell the end for state corporations, which grew quickly while Vladimir Putin, prime minister, was president.
Mr Putin's opinion was unclear on Wednesday. He has championed similar reforms but also voiced a desire for the state to continue to dominate the "commanding heights" of the economy, including sectors such as energy and banking.
"Putin is staying on the sidelines in this one and probably happy to let Medvedev take the lead," said a western banker. The "elephant in the room", he added was Rostechnologiya, led by Sergei Chemezov, an ally of Mr Putin's. It controls 400 enterprises, including state-owned defence, aviation, atomic power and automobile companies.
State corporations are immune from bankruptcy and not obliged to publish results. Their activities are overseen by observation councils which report to the government once a year. Their future has been in doubt since August when Mr Medvedev told the state prosecutor to investigate their activities and called for a debate on their management. Results of the probe are due next month.
"The big industrial state companies are going to have to prove their commercial viability or risk being broken up" said Chris Weafer, chief strategist at Uralsib investment bank.
Alexander Shokhin, the leader of the Russian Union of Entrepreneurs, called earlier this year for the removal of state corporations' privileges, recommending that they should be reorganised as 100 per cent state-owned limited companies.
Speaking at the Kremlin meeting on Wednesday, Mr Shokhin said the financial crisis had presented Russia with a "window of opportunity" to modernise the economy that would close by 2012 when oil prices are expected to return to pre-crisis levels.
By Isabel Gorst and Charles Clover in Moscow
