Privatisation or Re - Nationalisation in Russia? - Strengthening Strategic Government Policies Within the Economy

Zusammenfassung

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Recent years have witnessed increasing state involvement in the Russian enterprise sector, which has been met with contradictory reactions from investors. In the current article, we discuss the development of privatisation and corporate governance in Russia in comparison to other CIS. We provide three company cases with subsequent discussion on ownership, control, and corporate governance in Russia, given the increasing state leverage in the country's industrial sector. Aimed at facilitating discussion among policy makers, investors, and academics alike, we finally offer an insight into strategic dimensions of the Russian enterprise sector by developing a matrix of strategic government policies within the Russian industry.

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Privatisation or Re - Nationalisation in Russia? - Strengthening Strategic Government Policies Within the Economy

Introduction

During the 1990s, the former socialist countries of the Commonwealth of Independent States (CIS) have taken considerable steps towards privatising their enterprise sectors to rebuild their industrial competitiveness through more efficient enterprise management and governance. At divergent levels, the restructuring has facilitated an economic upturn across the CIS, as the private enterprise sectors are gradually catching up with Western corporate governance.

Within the CIS, Russia has been the leading country in terms of their share of the private sector in a country's economy from the very beginning of the transition period. During recent years we have, however, witnessed reversed development in privatisation in Russia. Initiated by the re-nationalisation of some of Russia's most prominent oil assets, the state is evidently regaining control over the country's strategic industrial sectors.

The strengthening of state ownership through the reformation of state holding companies and the introduction of hybrid forms of private and public governance has, in many instances, come at the price of destabilising the credibility of the Russian institutional and legal environment. On the other hand, the recent developments have so far done little to undermine investor confidence in the Russian economy; as indicated by several examples from the past year, increased governmental support through strengthened control and ownership in many Russian companies has been one of the major drivers of the stocks of the companies involved, on both domestic and international exchanges.

In the current article, we discuss the development of privatisation and corporate governance in Russia in comparison to other CIS, with a subsequent presentation of related Russian company cases and discussion on ownership, control, and corporate governance in Russia, given the increasing state leverage in the country's industrial sector. While extensive international critique has been posted on the subject of the re-nationalisation of Russian industrial assets, we attempt to provide constructive discussion on the pros and cons of the increasing role of the state in the Russian economy. Aimed at facilitating discussion among policy makers, investors, and academics alike, we offer an insight into strategic dimensions of the Russian enterprise sector with regard to increasing state control over Russian industrial assets and its implications for foreign investments in Russia.

Literature review of ownership, control and corporate go...

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