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. Last Updated: 07/27/2016

Entrepreneurs Defend the Privatization Push

At a time when privatization is under attack from parliament, managers of privatized enterprises are rushing to its defense.


Leaders of a new lobby, the Association of Private and Privatizing Enterprises, said Tuesday that they would press politicians not to repeal the privatization campaign.


"We had no intention to meddle with politics", said Leonid Kubarev, general director of the Kuibyshev Elektrozavod factory in Moscow and co-chair of the managing committee of the association. "But it is now necessary to exert our influence on politics, because politics are hindering us".


The association will hold its founding congress next week, and expects to host 1, 500 managers of enterprises from more than 80 Russian regions.


"Managers of any kind of business need a government with clearly defined boundaries of authority", Kubarev said. "The rules of the game should not change suddenly".


Kubarev said that his workers would oppose any attempt to turn it back into state property.


The new association wants to capitalize on the latent support privatization appears to enjoy among industrial managers. While some lawmakers who are also factory directors have vilified Yeltsin and his privatization program in parliament, privately they are asking for details on how to privatize, said Pyotr Filippov, co-chair of the association and a prominent pro-reform parliamentarian who heads the privatization committee.


"This is a sign that if the political message isn't getting through, economically, the message is getting through", Filippov has said in the past.


The association was set up last fall not as a lobby for privatization, but to offer support for managers trying to switch to a privately owned company in the midst of economic chaos, said Kubarev.


Filippov said the group was forced to change its orientation because factions such as the conservative Union of Industrialists and Entrepreneurs headed by Arkady Volsky started lobbying for a slow-down or reversal of privatization.


Like the Industrialists Union, the association now has its own set of experts, who not only advise managers on legal issues but also try to influence the drafting of law, and government taxes and subsidies, Filippov said.


More than 300 large enterprises and thousands of small businesses have already been privatized, but conservatives in parliament have attempted to repeal the program or to insert an option that would give all shares directly to the workers. Already, workers at many of the privatized enterprises have managed to get a majority of shares.


Filippov said that worker control posed a risk to privatization, as workers are unlikely to keep their own salaries low or fire themselves, even though enterprises need to cut costs and many workers have become superfluous.


But Filippov said that some workers were selling their shares to raise money, enabling potential investors to obtain a large enough stake to give them a say in the factory and ensure cost-efficient management.