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. Last Updated: 07/27/2016

Vouchers Continue Downward Spiral

Although privatized enterprises have started selling shares for vouchers, the price of a privatization check has continued to drop, hitting a record low of 4, 061 rubles Tuesday, down from 8, 700 rubles in early December.

Politicians and brokers blamed the drop of the voucher on the slow pace of privatization, and said that speculators would continue to invest in dollars instead of vouchers until the vouchers could widely be used.

Trade was listless at the Russian Commodity and Raw Material Exchange, with only 62 deals, mostly in small numbers of vouchers. The price dipped well below the 4, 000 mark, but recovered a little at the end of the day. The nominal value of a privatization check is 10, 000 rubles.

At a parliamentary committee hearing on privatization Tuesday, both reformist and conservative deputies used the low rate of the voucher to lambaste Dmitry Vasilyev, deputy chairman of the State Committee on Property which oversees privatization.

Georgy Zadonsky, a deputy linked with the Radical Democrats faction, blamed the drop of the voucher on the slow pace of privatization. The people now have their privatization checks but can not spend them, as only a few major enterprises have actually gone up for sale, he said.

Vasilyev agreed that, while nearly all Russians have collected their privatization checks, only 18 percent of all enterprises, about 35 percent of small businesses, and about 30 large government firms have sold shares on auction. For small businesses, the aim for 1992 was to privatize more than 50 percent, Vasilyev said.

Only a few major enterprises have sold shares for vouchers in Moscow, including the Bolshevik biscuit factory in December and the GUM department store, which is selling shares right now. On Friday, the first shares were sold for rubles on a secondary market, but they were in enterprises from the Far East.

To get back on schedule, Vasilyev advocated giving one-year credits to factories that privatize ahead of schedule, setting up more investment funds to help citizens invest their vouchers, and organizing auction centers where shares can be sold to the public. So far, shares in privatized firms have been sold mostly at exchanges, which are open only to brokers.

Replying to conservative deputies, Vasilyev insisted that Russians were not dumping their vouchers. Only 1. 5 percent of Russians have sold their vouchers, and another three or four percent might do so in the next few months, he said. The rest told pollsters they were determined to use their voucher or would only sell at a very high price, Vasilyev said.

Participants in the market had a very different view of why the voucher dropped. The voucher may fall to as low as 3, 500 rubles, said Sergei Popkov, who oversees the voucher market at the exchange, because "the market is filled with small-time speculators".

Now that the dollar is high, speculators put their money into the hard-currency market, Popkov said. When the dollar stabilized in December, the voucher rose to its high of 8, 700 rubles.

The larger brokerage firms, too, "are fed up with vouchers", said Leonid Gryaznov, president of brokerage firms Intrast. "It is very difficult for them to find profitable projects", he added.