Saturday, 18 February 2012

Audit Chamber head says Putin’s proposed privatization fee is doable

The head of the Audit Chamber, Sergei Stepashin, says he knows how to calculate what the so-called oligarchs still owe the state after the controversial and murky privatization of the 1990s.
Last week at a meeting with the Russian Union of Industrialists and Entrepreneurs, Prime Minster Vladimir Putin called the privatizations’ results “unfair.”
“Of course, this page must be turned. We must end this period, there are different options being offered, of course, we must discuss it with experts. But it must be done in such a way that society will accept the closing of this problem from the 1990s, of the, let’s just say it, unfair privatization,”
Putin proposed a one-off payment to compensate for their dubious gains, in a proposal that resembled Britain’s 1997 Windfall Tax.
“It must be either a one-time fee, or something else. We must think about it together. I think in the first place, society in general and entrepreneurs are interested in this.”
Stepashin said in an interview said today that while difficult, it would not be impossible to determine who owes what.
“In principle, one can calculate the difference in the price of those assets – from what they were purchased in the ’90s and what they were actually worth. But I must warn you, to do it will be difficult. If there is a need, we can solve the issue through legal procedures, bring in independent financial supervisors, including the Audit Chamber.”
“I recall that in 2003, the Audit Chamber finished its study of Russia’s privatizations in the 1990s,” Stepashin said. “Analyzing the results of the privatizations, we openly and honestly said that it ‘was conducted the worst possible way out of all European countries.’ This I quote verbatim from a member of the expert group, which worked together with the Audit Chamber, the Nobel laureate Joseph Stiglitz, an American professor. He is impartial, he grew up in a market economy. In not one country in the world, including Eastern European countries – Poland, Hungary, Czech Republic, Slovakia, I am already not taking into account China, Vietnam -- was this kind of privatization carried out.”

No comments: