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. Last Updated: 07/27/2016

Official Says Parliament Holds Up State Sell-Off

A prominent privatization official announced Tuesday that about 27 percent of all Russian enterprises had been sold to the public, but blamed parliament for holding up laws that could enable private enterprises to start functioning as private firms.

Alexander Ivanenko, first deputy chairman of the State Property Committee in charge of privatization, said at a conference of Russian entrepreneurs that 66, 000 enterprises have been privatized so far of a total of about 245, 000 state enterprises. Of the smaller enterprises such as food-production lines, shops and trading organizations, 54 percent had been privatized, Ivanenko said.

Of the larger enterprises, the first of which were sold off to the public only in December, 32 percent had re-registered as joint-stock enterprises, although most had still not gone up for sale, Ivanenko said.

Reuters reported last week that by May 10 shares in 1, 339 medium and large enterprises had been sold at auctions. With more than 6, 000 still to go before the end of 1993, that means that the campaign is falling behind schedule.

Ivanenko blamed parliament for holding up privatization. Parliament has yet to ratify an October agreement between former Soviet republics on the effects of privatization on enterprises with branches in various republics, Ivanenko said. Without that agreement, large enterprises cannot be carved up to allow privatization of the Russian part of the enterprise.

Last year's privatization program was adopted only in June, and this year's program has been withdrawn by President Boris Yeltsin to avoid defeat in parliament, Ivanenko said.

But regulations on what to do with enterprises once they have been privatized are not ready yet either, Ivanenko said. Laws regulating how much influence local and federal governments have over privatized firms, for instance, do not exist. Ivanenko said local governments should have a say in lay-offs at large enterprises, as they could affect employment in the whole region.

Echoing Yeltsin's recent tougher stance in favor of privatization after months of compromises, Ivanenko said factory workers had too many privileges in the privatization process, enabling them to get the bulk of the shares in their enterprises for free or at a discount. Other Russian citizens, such as government employees and soldiers, were disadvantaged in the privatization drive, he said.

Earlier this month, Yeltsin decreed that at least 29 percent of shares in a privatized enterprise should be offered at voucher auctions within three months of turning the firm into a joint-stock company.

Parliament has called for more privileges to the workers, and the more conservative factions have demanded that all shares be handed directly to them, rendering the privatization vouchers worthless. But the referendum has strengthened Yeltsin's position in pushing through the privatization campaign.

His decree also threatened to sack enterprise directors who were late going private, and to allow local privatization committees to sell off the enterprise for them.