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Today it is possible to say that the major structural reforms
announced by the Putin administration when it came to power would be
postponed until Putin's next term in office.
Four monopolies - the Transportation Ministry, Gazprom, Russian
Unified Energy Systems (RAO UES), and the housing and communal services
sector - will not be reformed before the next presidential election. At
the same time, reform prospects are now even fainter than three years ago - then, it seemed as if the presidential team had some
consensus regarding their necessity and direction.
The reason is clear enough: whereas in Spring 2000 economists were
developing the concept of reforms, after Putin's victory at the
presidential election German Gref's programme was transformed into a
governmental programme. This meant that the departments to be reformed started planning the reforms themselves.
Two reform drafts - in the housing and communal services sector and
RAO UES - managed to eventually reach parliament after endless
discussions. However, in both cases the executive authorities presented
their compromising amendments to deputies without a consolidated
position on these issues. As a result, both suggestions have been
severely criticized from both right and left wing. The left wing
criticizes them for supposed liberalisation of consumer prices. The
right wing criticizes them for the lack of guarantees on the creation of
competition after liberalisation of prices.
It is easy to notice that the discussions repeat to the word the
main argument in the early 1990s: what is first - liberalisation or
privatisation. Not surprisingly the major opposing ideologist of both
reforms is Grigory Yavlinsky. On the one hand, liberalisation in a
monopolised market will lead to concentration of capital in the
management of the monopolies and redistribution of property to their
benefit. On the other hand, it is unclear how privatisation will be
carried out in a situation of fixed prices and lack of profitability.
History of reform plans with the other two monopolies offersan even
better lesson. Ever since members of Putin's team gained control of the
Transportation Ministry and Gazprom, both companies have been mostly
left out of the government's debates. Liberal reform ideas were
necessary while they were directed against the previous management teams
of those companies - but why bother attacking your own team? Moreover,
prior to replacement of the management of both corporations, their
wealth was constantly emphasized; while the new executives at both
monopolies are actively promoting the idea that they are experiencing
internal crises and extreme financial hardships, saying this should be
an adequate argument to support both increased tariffs and postpone
restructuring. In other words, the stronger Putin's team grows, the less reforms have been supported inside the team. Currently, structural
reforms are obviously unpopular in Putin's team.
See also:
Energy Sector Reform
Housing and Communal Reform
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