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. Last Updated: 07/27/2016

EDITORIAL: If Gazprom Were Fairly Privatized ...




Before, he was Gazprom's representative to the government. Now he will be the government's representative to Gazprom. Either way, for Viktor Chernomyrdin, it's familiar territory.


During Chernomyrdin's six years as prime minister, he was widely seen as sheltering the gas industry from taxes, and his political party Our Home Is Russia was nicknamed Our Home Is Gazprom.


It's not surprising Chernomyrdin would nurture this industry: He used to run it, back when it was the Soviet Fuel and Energy Ministry and before it was privatized in a secretive 1992 arrangement that left the government holding 40 percent and management and unspecified others holding the rest.


Politicians and media have suggested Chernomyrdin owns stock in this company. But asked before parliament in 1995 whether that was so, he replied with a pause, a smile and the words: "Next question."


That same year, former Finance Minister Boris Fyodorov broke a long-standing silence , writing in Izvestia that Gazprom's privatization made for "the biggest robbery of the century, perhaps of human history."


So as we watch Chernomyrdin's triumphant return to his home Gazprom, it's worth remembering a point Fyodorov made then: If Gazprom had been privatized in accordance with the noble stated principles of the voucher privatization program - under which each of the 148 million citizens was to get an equal share of the national wealth - Russia would be an entirely different place.


Consider: Gazprom management tightly controls the trade in Gazprom shares, so it is hard to say what each share is truly worth. But the company's value has been estimated over the years at anywhere from $250 billion to $950 billion. Assume that even half of Gazprom's wealth had been reflected in its share price. That would mean every Russian citizen could have received a voucher worth from $850 to $3,200. For a family of three, that would have been from $2,500 to $9,600 in stock, to say nothing of dividends.


Imagine if all of the oils and metals and telecommunication companies had been parceled out in the same way, and not just handed over to a few insiders. Russia would have overnight had an enormous middle class, one with cash in its hand - enough to start up small businesses, or to fuel an economic revival through consumer spending.


People would be talking about Russian democracy, not oligarchy. The Communist Party would be a relic, not the largest faction in parliament. Taxes could come from millions of successful citizens, not from two dozen recalcitrant fuel exporters. And the prime minister who presided over such a Russian renaissance would be poised to succeed Boris Yeltsin, not hunting for work.