Privatization In Russia Essay -- essays research papers

For some, the privatization of Russian industry has been one of the great success stories of Russias painful economic transition quick, firm and radical work was taken to shift the great bulk of Russian industry appear of state hands, at that placeby laying the basis for a radical restructuring of enterprises and improvements in their performance. Others gull privatization as a best a failure, at get through a catastrophe. Not surprisingly those opposed to the market and economic clear as a whole sh be this view. But many commentators who see themselves as supporters of reform find plenty in Russian privatization to point out the process led to the transfer of willpower to in arrogate people and as a consequence no beneficial restructuring of enterprises or the economy backside be expected. While this paper will attempt to cover the trine key facets of privatization that enterprises be transferred to private self-control that the new owners be satisfactory de jure and d e facto to execution ownership rights and, finally and ultimately most importantly, that the new owners exercise their ownership rights in such a way as to puzzle out to the loftyest degree improvements in enterprise performance. The key issues to be surveyed, therefore, argon who as a result of privatization obtained ownership of Russian industrial assets, and are they appropriate owners can new owners, particularly if they are appropriate owners, exercise their ownership rights and has privatization led to improvements in enterprise performance? The paper will nap with privatization only within the industrial sector thereby ignoring the highly disputed privatizations of the last twelve months or so in the vim and utility sectors. Who are the new owners?Global data showing about 70% of GNP being produced in the private sector reflects the high levels of privatization of industrial enterprises, with the great bulk of enterprises having been privatized by mid-1994. However priv atization does not inevitably mean the complete removal of the state from an equity involvement in enterprises. State ownership. The state retains shareholdings in a significant number of privatized enterprises on the basis of government decrees declaring the strategical significance for national security of the enterprise. tradeholdings cast off from 20 to 51 per cent or a Golden Share (a single share giving veto rights over certain strategic iss... ...nagers does not stand up. The indications are that they knew what they were doing and judged that outside owners would eventually assert themselves. piecemeal they are doing so, and gradually they are improving their ability to exercise and apply their ownership rights. Sometimes they are doing so in ways that are no less reprehensible than the methods of the manager-owners. There are also reasons to be concerned about the long-term consequences of the sort of bank-dominated and highly integrated ownership that many of the out siders have brought. The best that can be said at this stage is that all modern economies have at their peak a corporate sector dominated by large integrated institutions. understandably the private sector, and thereby privatization, has to bear some responsibility for an economy in which it has a 70% share but which is unable to provide in anything like adequate proportions growth or welfare. But in this there are other factors also at work. Indeed there are some small indications, at both macro- and micro-levels, of a positive correlation between private ownership and good performance. With time that correlation could healthy become stronger and more evident.