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. Last Updated: 07/27/2016

Acting Property Minister Named

Alexander Braverman has been named acting state property minister, prompting analysts to say the Russian government intends to get more serious about privatization than it was when it came to power.

"The state property minister is usually replaced when something is to be done with that property," said one analyst, who spoke on condition of anonymity, adding that as the government desperately seeks cash for the budget, privatization is once again seen as a reliable source of revenue.

Earlier this week Braverman, 44, replaced State Property Minister Farit Gazizullin, who had a heart attack last October and has been in and out of hospitals since.

It is not clear whether Braverman, who has held various jobs at the privatization ministry since 1992, reaching the post of fist deputy minister in 1997, will become minister.

First, Gazizullin would have to be officially dismissed, and Russian labor law does not allow the dismissal of employees who are away from work sick, said a spokesman for the State Property Ministry.

There are indications, however, that Braverman has strong allies who want him to be minister.

According to one analyst with a major Russian investment company, Braverman orchestrated last year's sell-off of a 2.5 percent stake in the natural gas monopoly Gazprom. Earlier, he participated in the failed auction of a controlling stake in state-owned oil company Rosneft, and, according to the analyst, he tried to hand the troubled oil firm over to Gazprom.

"Braverman is certainly close to [Gazprom chairman Rem] Vyakhirev," the analyst said.

Braverman is also a veteran of the team that was originally formed by former minister Anatoly Chubais and that carried out the quick-and-dirty privatization that earned plaudits in the West but jeers in Russia.

Braverman is known to foreign investors as a champion of investors' rights and a reasonable partner in talks.

"Braverman is a very flexible person and a good negotiator," one Western analyst said.

"My experience is that Braverman is arguably the strongest professional with the State Property Ministry," agreed Charles Blitzer, head of emerging markets research with Donaldson, Lufkin & Jenrette in London.

"He is very reform-oriented. [His appointment] is positive news," he said.

Braverman's promotion may also mean that Yevgeny Primakov's government is changing its privatization policy.

In September, when Primakov was appointed prime minister, he voiced a conservative approach to sell-offs, according to which companies could only be sold when a change in their ownership was consistent with Russia's national interest.

Now, that view has changed: the government tends to think "in terms of fiscal expediency, seeing loopholes in the budget," said Stephen O'Sullivan, co-head of research at United Financial Group.

There is also the matter of running the remaining state property efficiently.

First Deputy Prime Minister Yury Maslyukov has recently met with top State Property Ministry officials, stressing the need to make sure a bigger share of partially state-owned companies' profits finds its way to the budget.

The management of state property is a priority for the government, which is widely criticized for pushing an unrealistic 1999 budget.

"The government will have to make a number of unpopular decisions on privatization issues, and Braverman looks like the most convenient figure to tackle them," said an analyst with one of Moscow's brokerages.

Among other things, Braverman will have to tackle the issue of a number of privatized companies for which new owners have not transferred funds to the government. These companies will have to be auctioned again.

Another task for Braverman will be to make sure the state can sell 25 percent of telecommunications holding Svyazinvest this year as planned. That involves giving Svyazinvest more control over its numerous regional subsidiaries.

"There may be a redistribution of ownership and power in regional telecoms," said Marina Ionova, head of research at Moscow brokerage Aton.

She suggested that the federal government would vote with its stakes to put representatives on the boards of regional telephone companies, forcing them to integrate more closely into Svyazinvest.