Moscow — Russia needs to attract as much private money as possible and could offer non-controlling stakes in large state companies to investors as part of a privatisation drive, Andrei Kostin, the head of state bank VTB , said on Monday.
Earlier this month, Kostin wrote that Western sanctions had destroyed elements of Russia’s economy that took 30 years to build and the country needs to create a new growth model through privatisations, reallocated budget funds and more state debt.
In an interview with television channel Rossiya-24, Kostin said Russia needed to attract as much private money as possible and to increase public investment, which he envisages through a sharp increase in the level of public debt.
“Privatisation can come in many forms,” Kostin said. “It could be some kind of non-controlling stake in public companies,” Kostin said in the interview.
Kostin cited the sale of a near 20% stake in oil major Rosneft as an example, suggesting similar moves could be made with oil pipeline monopoly Transneft, Russian Railways or Russian Post.
He said some industries lacked competition, a hangover from Soviet times, a consequence of which would ultimately see more investors take money elsewhere.
Telecoms operator Rostelecom, defence conglomerate Rostec and state nuclear energy company Rosatom could have subsidiaries privatised, he said, adding: “The main thing is not to miss the moment when we can attract private money here.”
He criticised Anatoly Chubais, who in 1995 became known as post-Soviet Russia’s privatisations tsar, presiding over a so-called loans-for-shares scheme under then-President Boris Yeltsin.
Under that programme, state property was sold very cheaply to well-connected businessmen who became known as “oligarchs”. They wielded considerable political influence and embodied some of the worst aspects of a new capitalist system characterised by a vast gulf between the super-rich and ordinary Russians.
Kostin said his proposals were not an attempt to sell off the people’s wealth.
“We have a different country now, a different president, a different government that cannot allow what happened then,” he said. “Then it was a completely new sphere, there was no experience, nothing at all…”
Reporting by Elena Fabrichnaya; Writing by Alexander Marrow Editing by Gareth Jones – Reuters
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