Sad Diagnosis: Russian Market Reforms Turn Into Administrative Bustle

Russian electorate treats any economic changes from a political point of view
The forum “Financial week in Moscow” opened today. Head of the Federation Council Industrial Policy committee Valentin Zavadnikov spoke at the forum’s opening; he said that none of the reforms currently carried out in Russia are market reforms. In fact, under the guise of reforms, ministries, state-run monopolies, and local authorities settle their own mercantile problems.

According to the senator, the majority of the structural reforms carried out in Russia today are not effective. For instance, the reform of the electric power system is seriously stuck at the moment; the more discussion it causes, the quicker it loses its market nature. Valentin Zavadnikov says that the reform of the Russian railways is rather slow; moreover, it is not a reform in fact at all. As for reforming of the gas market, the senator mentioned that no conceptual documents had been developed on the problem yet.

We should mention that three years have already passed since the moment when the first discussions on the necessity of reforms were started to the moment when necessary legislation was developed. At that, all parties involved have failed to come to an agreement on the basic postulates of the reform. Under the strongest political pressure, the State Duma gave the first reading to the package of laws on the reform. However, Duma deputies and Federation Council members immediately discovered lots of incompatibilities in the documents and pointed out that the documents needed more perfection from a judicial point of view. Moreover, Duma deputies discovered that when representatives of the energy monopolist, RAO UES of Russia, made amendments to the documents on the reforms instead of deputies, they not always acted correctly. As a result of the mentioned facts, a second reading of the laws on reforming of the Russian energy system is currently open to question.

Valentin Zavadnikov is sure that the same situation can be observed with the reforms of the communication sphere. The RF Communication Ministry was to have presented a concept of reforming the traditional telecommunications sphere till the end of the year. Instead of it, the ministry presented amendments to the law on communications, which certainly have nothing to do with reforms of the sphere on the whole.

The senator mentioned that reforming the communal and housing sphere is also actively discussed. The discussions are closely connected with political problems. Valentin Zavadnikov thinks that currently developed laws on local self-government don’t settle the problem of the communal and housing economy reforming, as the services still remain under the jurisdiction of municipal authorities, while these are market services all over the world.

Meanwhile, the slow realization of structural reforms and considerable presence of the state in the economy hamper development of the Russian financial market, which consequently deprives the economy of necessary investments.

In this situation, it would be important to mention that any kind of actual market reforms is out of the question for the nearest 1-1.5 years. Coming parliamentary and presidential elections will turn any kind of important problem into a political problem. As is well-known, any kind of market reforms carried out at the expense of ordinary consumers (voting electorate, to be precise). That is why nobody from the political elite, who hopes to retain his position, will take the risk of supporting any measures that are unpopular among the population.

Kira Poznakhirko PRAVDA.Ru

Photo: Russian State Duma building

Translated by Maria Gousseva

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