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. Last Updated: 07/27/2016

Putin Against Busting Up Monopolies




Acting President Vladimir Putin declared Wednesday that he strongly opposed breaking up the country's huge natural gas, electricity and rail transport monopolies, and said management must look out for workers' rights.


Some economists and liberal politicians have suggested the Soviet-era monopolies should be divided into smaller enterprises and further privatized, a prospect that has often drawn harsh criticism from nationalists on the left and the right who have called such entities national champions that should be retained much as they are.


Speaking to a congress of the Federation of Independent Trade Unions of Russia, Putin said he, too, was against breaking up the gas giant Gazprom, the Unified Energy System electric utility, and the Railways Ministry.


The Russian leader's comments came in the wake of reports, later denied, that Gazprom's management was considering shedding unprofitable activities. The company owns a third of known world gas reserves and supplies a quarter of Europe's gas.


The International Monetary Fund has asked Russia to separate gas transport from gas production as a condition for renewed lending.


On Wednesday, State Property Minister Farit Gazizullin said the government planned to sell 2.5 percent and 0.87 stakes in Gazprom, but there was no word of a breakup.


German company Ruhrgas AG owns 3.5 percent of Gazprom outright and 0.5 percent more through a joint venture with the Russian gas giant.


The Russian government last year planned to sell 2.5 percent of Gazprom at a minimum price of $660 million.


On the electric utility, Putin noted that "perhaps some elements within the Unified Energy System are dragging the economy of the whole structure backward, but there can be no talk whatsoever about its breakup," the Interfax news agency reported.


The statement was the second time this month that Putin had been critical of UES, whose chief executive Anatoly Chubais had been touted in some quarters as a potential liberal influence on the acting president.


As a fellow St. Petersburger who had worked with Putin in the early 1990s, Chubais had even at one stage been mentioned as a possible prime minister after the March 26 presidential elections for which Putin is an unbackable favorite.


Turning to workers' rights, Putin said that employees of small- and medium-sized enterprises were largely unprotected because of imperfect legislation and because trade unions at that level were still embryonic. For now, that put the burden of respecting workers' rights on management, he said.


"Business must get used to the idea that its leaders bear full responsibility for the destiny of employees," Putin said. "It is impossible to consider a market to be civilized when salaries aren't paid for months, while enterprises are yielding profits."


He also said Russia could not hope to develop normally unless the problem of corruption was tackled.


"We are doing very serious work now and it shall be intensified in the future," Putin said. "Otherwise, corruption would eat away everything."