Privatisation in Russia: One step forward: Two steps back?

AGAINST A BACKGROUND of political chaos and continuing economic decline, privatisation seems to be one of the few positive fruits of Russian economic policy since 1991. According to the Russian government's Western advisers, the privatisation now taking place is 'the fastest in human history', sweeping up 3-4% of state industry per month, and is 'the most successful reform in Russia'.! Is this really the case, or is the programme a mere Potemkin village, disguising Russia's continuing economic disintegration? This article makes three general points about privatisation in Russia. These are advanced more as points for discussion than as definitive statements: evidence on how the programme has actually been implemented is still very sketchy.2 First, the rhetoric of revolutionary transformation is somewhat misleading: the narrative should be one of an evolution in economic policy, since privatisation is best seen as the continuation of pre-1991 shifts in property structures. Second, the 'bad news' is that privatisation is insider-dominated, contrary to the government's hopes and expectations. That the government nevertheless pressed ahead with the reform is best explained in terms of its political utility-for the government as a whole, for the politicians running the scheme, and for the government's international supporters.