UPDATE 2: Peskov says privatization important, no decision made

(Rewrites throughout)

MOSCOW, Sep 7 (PRIME) -- Russia has made no decision on privatization yet, presidential spokesman Dmitry Peskov told reporters on Tuesday, commenting on a proposal to reduce the public sector of the economy by the Audit Chamber’s head Alexei Kudrin.

Kudrin said in a Kompania magazine article that it’s time to reduce the public sector of the Russian economy as most companies with state participation are less flexible in terms of management and highly dependent on bureaucracy. He said “privatization may change the situation as it will give enterprises effective owners.”

Peskov said, “Privatization … is important, but it should not be an absolute end in itself… So far, as you know, no decision has been made on the issue.”

“We have repeatedly encountered the fact that as a result of privatization, the entire industries were on the verge of disappearing, which then had to be consolidated with great difficulty in the hands of the state and, through huge investments, revived virtually from scratch,” Peskov added.

Peskov also said that the Russian market “has entered the stage of recovery, but so far the growth is minimal.”

Kudrin said in his article, “The public sector may play an important and positive role at times, but it is time for it to start shrinking. There is no ‘special way’ in this situation. State companies rarely become economic and innovation drivers.”

As many other states, Russia significantly increased its involvement in the economy after the crisis of 2008–2009, but in the period of post-crisis development it is important to get rid of this practice as it bears many risks if not terminated in time, Kudrin said.

Only four companies out of Russia’s top-10 are private, while only private companies make the US’ top-10, Kudrin said.

“It (privatization) will not only have a positive impact on the results of separate organizations, but will also increase the economy’s efficiency as a whole,” he said.

Kudrin added that privatization may bring about 200–300 billion rubles per year to the budget within five to six years.

Peskov also said that although Kudrin is a qualified specialist in the field, there are other points of view on privatization.

“You know Kudrin has tremendous experience, great expertise. This is a man who has been the best finance minister in the world for more than one year, so of course his point of view is important. At the same time, there are other expert points of view,” Peskov said.

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