Posted on November 16, 2009 - by Venik
President Medvedev's Follow-up On Disassembling State Companies
The Kremlin may well want to encourage speculation as to whether President Medvedev was truly instructing Prime Minister Putin on making state enterprises “comptetitve”, but it is wholly unlikely that the two would do anything that wasn’t pre-arranged between them. If it were otherwise, a political rupture would be underway, with wide repercussions, and nothing indicates such a thing now. (Of course, human nature being what it is, no one likes to take direction too long from even the most illustrious former boss.)
The follow-up to the President’s speech Friday does make it seem, in any case, that Mr. Medvedev is serious and wants to proceed with economic change. (See also here.)
Government-run enterprises are famously less efficient than private ones. Corruption is more likely, too. So, having taken possession of the “commanding heights” of the economy away from Yeltsin era oligarchs, the Putin/Medvedev team (or the Medvedev/Putin team, as you will) may now be ready to privatize again on a broader basis–and with fresh capital from abroad.
At least one critic, economist Vladislav Inozemtsev, thinks Medvedev’s words are “inspiring”, but “not realistic.”.
“The problem,” he says, “is that most of the people listening to the speech in the Kremlin’s St. George Hall on Thursday — especially those who sat in the first row — are the very ones who have gained the most from the raw materials-based economy and imperfect democracy that Medvedev criticized so harshly. How will Medvedev possibly be able to overcome the powerful clan in the government and Kremlin that is most interested in continuing the anti-modernization status quo?”
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