REVERSING DEFENSE PRIVATIZATION?

Publication: Monitor Volume: 2 Issue: 103

Russia’s Minister for Defense Industries, Zinovy Pak, has recommended that the Russian government quietly buy out previously privatized defense enterprises of strategic importance and also those that are monopolies in key areas of defense production. In an interview with the magazine Expert, Pak said that such a policy would correct earlier mistakes made in the privatization process. He also said, however, that some of the 500 defense enterprises currently ineligible for privatization might be converted into joint-stock companies. But even here Pak suggested that the government might want to retain a controlling share. (Itar-Tass, May 27) Pak’s published remarks come on the eve of today’s nationwide conference of defense enterprise leaders. The conference is to be attended by President Boris Yeltsin, Prime Minister Viktor Chernomyrdin, and First Deputy Prime Minister Oleg Soskovets.

A Russian journal, meanwhile, reports that 36 percent of Russia’s defense enterprises and organizations are state-run, another 34 percent are joint-stock companies in which the state holds a substantial block of shares, and the remainder are private. With regard to military research institutions, 70 percent are said to be state-run. Employment has been reduced substantially in the defense sector, the journal reports, and the average wage there is currently lower than the national average. (Ekonomika i zhizn, Moscow, No. 21, May 1996)

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