Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

EDITORIAL: Considering The Dread 'N' Word

Prosecutor General Yury Skuratov's attack on a two-year-old privatization auction at the UES national power grid surprised and frightened Moscow's business and political circles.

The concern was that pulling on this nagging loose thread might unravel the entire package that is privatization.

It's an understandable conclusion. After all, the major oil, gas and metals exporters were privatized in shady deals, and the oligarchic giants who swallowed them are now weak - witness the waning influence of Boris Berezovsky at ORT and Transaero, or of Uneximbank's Vladimir Potanin at the Sidanko oil company.

What's more, Moscow Mayor Yury Luzhkov has been calling for the most infamous of these auctions to be overturned. And now unapologetic Communists like former Gosplan chief Yury Maslyukov are in power.

Does this mean impending nationalizations? Not necessarily.

Many firms have already been run into the ground, so it may be easier to wring cash out of the IMF than the oil majors - and wooing the IMF means avoiding the 'n' word.

What's more, the oligarchs have always devoured their own. But that hasn't changed the system itself, which always finds another Potanin, another Berezovsky (or another Oleg Boiko, he of the OLBI credit cards and Kremlin connections - remember him?) And it's likely to be an oligarchy until there are democratic counterweights like a strong parliament, and begins to punish corruption.

Meanwhile, here's a heretical thought: What would be so bad about selected renationalization? Is anyone getting anything out of Norilsk Nickel or Sibneft now, other than a few Russian plutocrats and Cyprus banks?

Renationalizing raw material export giants that have had their assets stripped and profits whisked abroad would be a fine idea. At least then, the state would get some revenue - from the sale of natural resources. Such renationalizations could also be a prelude to genuine reprivatizations, with open tenders and international participation.

Some will argue that advocating renationalizations and reprivatizations is a slippery slope. But the slippery slope was accepting corrupt privatizations in the first place. No one in theirright mind will ever invest in a property tainted by association with the most publicly sleazy sell-offs - precisely because they were sleazy, and so for decades will be targets of angry talk of renationalization.

If the IMF really cared for the rule of law it preaches, it could adopt above-board reprivatizations as its loan conditions. It couldn't be worse than advocating higher taxes and recessionarily tight budgets - both of which will eliminate jobs, growth and consumer demand with each passing day in 1999.