Publication: Monitor Volume: 5 Issue: 116

More than fifty large Russian corporations and the government today signed an agreement to freeze prices in a number of basic sectors, including energy, metals and transportation, for the rest of the year. The signatories included United Energy Systems (UES), Russia’s electricity grid; Gazprom, the natural gas monopoly; and a host of oil companies. First Deputy Prime Minister Nikolai Aksenenko, who presided over the signing ceremony, called the agreement “a new step in stabilizing the situation in the real sector of the Russian economy” (Russian agencies, June 16).

Aksenenko denied that the agreement represents “interference” in the economy or government “diktat,” but other observers disagree. One newspaper today called the agreement an “antimarket” measure, noting that the oil companies which signed it had been warned they would be cut off from Russia’s oil export pipeline if they refused to go along. The paper added, however, that the oil companies were probably promised lenient treatment from the tax authorities if they did sign the agreement (Kommersant, June 16). Another account noted that a similar price-fixing plan had been suggested by Yuri Maslyukov, the Communist Party economist who was economics tsar under Yevgeny Primakov. The plan, however, had been shot down for fear of angering the IMF (Vremya-MN, June 16). Interestingly, one of the signatories to the agreement was Anatoly Chubais, the one-time standard bearer of market reform in Russia. Chubais, who currently heads UES, said that the agreement might have a “healing effect” on the economy. “It is impossible to set prices with agreements or decrees, but agreement can put a stop to dangerous trends,” Chubais told reporters (Russian agencies, June 16).