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. Last Updated: 07/27/2016

Privatization Criticized By Premier

Prime Minister Viktor Chernomyrdin on Tuesday criticized firms that had reduced production following privatization, and he called for state mechanisms to control them.

Meanwhile, Deputy Prime Minister Anatoly Chubais defended the government's privatization program and renewed his attack on changes now proposed by opponents in parliament which would fundamentally change the privatization laws.

Russia has already privatized one-third of all state-owned small businesses, and in the last two months has started selling shares to workers and to the public in bigger state-owned firms.

But Interfax on Tuesday reported that Chernomyrdin told a meeting of regional privatization officials that small-scale privatization had been too slow.

He said that privatized enterprises had often reduced their productivity and this was "the major ailment of the privatization process". He said many private firms, joint-stock companies and cooperatives had "no interest in restructuring".

Chernomyrdin's solution, the agency reported, was the creation of a "control mechanism for all forms of property, including state-owned, privately owned, rented and other, since private enterprises should not be outside the sphere of activity of the state".

"Tough and forceful measures" could be required, Chernomyrdin said, but this would have nothing in common with the old methods of centralized administration.

According to Itar-Tass, Chubais told the same meeting that he would never agree with the idea of giving a majority of shares in privatized state firms to their workers collectives, the form of privatization outlined in the "fourth option" proposal now before parliament.

He said that the relations with republics inside the Russian Federation posed another problem for privatization.

While 46, 000 firms had been privatized in Russia, bringing in 164 billion rubles to the budget, the pace of the sell-off was uneven between regions.