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Foreign companies eager to grab a bite of Russia’s privatization cake
Published: 27 October, 2010, 21:55
Edited: 28 October, 2010, 05:53
TAGS: Investment, Oil, Russia, Russia and the global economy, Prime Time Russia, Big deal, Finance
A number of foreign companies might obtain significant shares in Russia's upcoming privatization of its most profitable companies.
This is according to a report published by Stratfor, an influential think tank and consultant to the US government.
As Stratfor found out, over the next three years Russia plans to privatize profitable state companies with a net worth of $50 billion.
The reason for such a move is Russia’s need for considerable funds so that the country can proceed with a range of fairly expensive policies, including social ones. Other pricey items on the list are military reform, transport reform, development of nanotechnologies and improving telecommunications.
To back up the projects, Russia is going to sell around 5,000 medium-sized companies. The remaining money will be made through selling stakes in Russia’s leading companies, such as VTB Bank, Rosneft and Russian Railways.
According to Stratfor, the likes of US’s Merrill Lynch and Italian Eni have already shown an interest.
Although not all Russian companies are particularly happy about such an outcome, some economists say that this privatization will be a move in the right direction.
“Certainly the dependency of the Russian economy will increase on the inflow of foreign investment,” Yaroslav Lissovolik, chief economist of Deutsche Bank Russia, told RT. “But this will lead to greater integration between Russia’s micro economy and the global markers.”
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Russian people Don't allow this!!!!!!!!!!!!!!!