What was the loans-for-shares scheme in Russia's privatization?
The loans-for-shares scheme was a 1995 arrangement proposed by banker Vladimir Potanin and endorsed by deputy prime minister Anatoly Chubais. Commercial banks lent money to the Yeltsin government in exchange for leases on major state assets including Norilsk Nickel, Yukos, Lukoil, and Sibneft. When the loans were not repaid and the enterprises were not returned, the arrangement became an effective sale of vast state assets at very low prices to a small group of politically connected oligarchs.
How did voucher privatization work in Russia in the early 1990s?
The Russian government distributed vouchers to approximately 144 million people, each representing a share of national wealth that could be exchanged for stakes in privatized enterprises. Roughly 98 percent of the population participated, but most people sold their vouchers quickly for cash because they were poorly informed about the program or needed money to survive the post-Soviet economic collapse. As a result, most vouchers and shares ended up in the hands of enterprise managers, concentrating ownership rather than distributing it.
Who led Russia's privatization program in the 1990s?
The privatization program was led by Anatoly Chubais through the State Committee for State Property Management. The broader economic reform team assembled by Boris Yeltsin was led by Yegor Gaidar, then a young reformist economist, who studied Hungary as a model and was influenced by Poland's use of shock therapy.
Why is Russia's privatization described as katastroika?
Katastroika combines the words catastrophe and perestroika to describe the economic transition that followed Soviet privatization. The economic collapse concentrated wealth among a small group of oligarchs while ordinary Russians lost savings and livelihoods. The transition has also been called "the most cataclysmic peacetime economic collapse of an industrial country in history."
What happened to privatized companies in Russia in the 2000s?
From 2004 to 2006, the Russian government began renationalizing companies in sectors it designated as strategic, including oil, aviation, power generation equipment, machine-building, and finance. The state-owned company Rosoboronexport took control of Avtovaz, Russia's primary car producer, and in June 2006 acquired 60 percent of VSMPO-Avisma, which accounts for two-thirds of global titanium production.
How many businesses were nationalized in Russia after the invasion of Ukraine?
At least 200 businesses have been nationalized in Russia since the start of the Russian invasion of Ukraine. This wave of nationalization in the 2020s marked a broad reversal of the privatization reforms that followed the fall of the Soviet Union.