Publication: Monitor Volume: 2 Issue: 32

Russian interior minister Anatoly Kulikov entered the realm of economic policy yesterday when he called for several large companies and five leading private banks to be nationalized as a means to raise government revenue. The revenue would then be used to pay Russia’s impoverished Interior Ministry and regular army troops. Among Kulikov’s industrial candidates for partial renationalization were the oil giants LukOil and Yukos, the gas monopoly Gazprom, and the automobile manufacturers Zil, KamAZ, and AvtoVAZ. Among commercial banks, he mentioned Promstroibank, Agroprombank, Mosbiznesbank, Mostbank, and Bank Imperial. (1) "We should partially nationalize those major commercial monopoly structures, which can put money into the treasury, but are not doing so for various reasons," Kulikov told the Russian daily Izvestiya. (2) A spokesman for Promstroibank said that bank would have no objection to being nationalized, provided the state bought its shares for the going market price, but that expropriation would be another matter.

Kulikov said his ideas had been discussed at the February 7 Russian Security Council meeting. On that same day, a Russian deputy interior minister told the Federation Council that the ministry was catastrophically underfunded, at least in part because of military operations in Chechnya. Salary arrears amount to 3.4 trillion rubles, he said, and the ministry overall needs 13 trillion rubles. Deputies were unresponsive to his pleas. (3) Two days later, on February 9, Kulikov first proposed his nationalization idea as an emergency measure to fund the MVD and the Russian army. His proposals, which also included such measures as widening the "ruble corridor" and reviewing oil export tariffs on domestic oil, were rejected yesterday by a Russian deputy minister of the economy, who described them as contradicting both the government’s plan to privatize the oil industry and the conditions imposed by the IMF for a $9 billion loan to Russia.

…While Duma Commission Prepares to Review Privatization Process.