Russian Federation president Dmitrii Medvedev's aide Arkadi Dvorkovich stated at the annual investors' conference at the St. Petersburg Economic Forum, "Russia will no longer be building state capitalism, and relying only on large state companies is the road to nowhere," and his remarks is sending anxiety throughout the Russian investment community.
Dvorkovich added, "This is a scenario in which economic growth will amount to 1-2 percent, its prospects are exhausted. We need new investments, hundreds of new companies and projects. This is what lies behind the widened privatization of assets… by relieving companies of state participation the authorities will help to develop the stock market in the country."
Finance Minister Aleksey Kudrin told investors at the conference that the companies subject to privatization could include Aeroflot, but investors' enthusiasm has been tempered by the fact that the Russian government has even been promising to sell Rostelecom into private hands for many years, Svobodnaya Pressa reported.
Dvorkovich stated that the government has been instructed to "finalize" the program for the privatization of state property by 1 August, commenting, "For some companies with large state shares it is possible and necessary to carry out more privatization, more quickly."Among the companies proposed to be opened up to private investors of most interest to foreigners are energy giant Gazpromabout which Dvorkovich stressed that here there is "no hurry" and state pipeline monopoly Transneft.
By. Charles Kennedy, Deputy Editor OilPrice.com
Charles is a writer for Oilprice.com