What to make of Russia’s announcement that it will sell stakes in some of its publicly-owned companies next year?  The government has already drawn up a list of 5,500 companies that will be divested, and Bloomberg’s report suggests that the move could spur growth in companies whose remit had previously been restricted by state ownership.  Prime Minister Vladimir Putin and Finance Minister Alexei Kudrin have previously suggested that the relaxing of state controls would help the economy return to growth, although plenty of critics are questioning the government’s intentions, as the more glaringly obvious point is that the privatization is an unavoidable bid to bolster flagging public funds.  

Russian companies have reduced their foreign debt — which exceeded $500 billion around the start of the year — to $303.5 billion as of Oct. 1, according to Central Bank data. Recapitalized state banks helped with refinancing, but the overall debt burden remains high.

Investors will also want more clarity on navigating the country’s bureaucracy and on which stakes will be sold and when, said Meehan, who took over as head of UBS in Russia and the CIS in March 2008.

“The government’s announcement is obviously not a signal that they’re ready to cede control of oil companies to foreign investors,” he said. “But it would clearly help if Russia could fully define to what extent foreign investment and foreign control is welcome.”

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Last 5 posts by Robert Amsterdam

• Practicing Legal Nihilism - November 24th, 2009
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• RA's Daily Russian News Blast - Nov 24, 2009 - November 24th, 2009
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