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Today's paper. Last Updated: 06/04/2012

Radical Reformer to Replace Polevanov

Pyotr Mostovoi, a top privatization official with a reputation as a radical reformer, was named acting head of the State Property Committee on Thursday in a move that brought enthusiastic applause from liberal economists and officials.


Mostovoi, 45, replaces Vladimir Polevanov, whose brief tenure as Russia's privatization chief ended after he called for some companies to be renationalized and labeled foreign investment a threat to national security.


Mostovoi, who calls himself "one of the creators of privatization in Russia," vowed in an interview with The Moscow Times on Thursday to reverse "the intolerable departures from state economic policy" that took place during Polevanov's three-month tenure.


A presidential spokesman, Alexander Kuryakov, said Mostovoi was selected by the government and approved by President Boris Yeltsin in a decree signed Wednesday.


Most observers said the choice looked like the government's latest attempt to signal continued support for the reformist track backed by First Deputy Prime Minister Anatoly Chubais, and to show that Polevanov's conservative views were an aberration. It should also reassure an International Monetary Fund delegation, in town to negotiate a $6.4 billion loan for Russia.


"He's at the absolute core of reform," said Roger Gale, who heads the Moscow office of the International Finance Corporation, an arm of the World Bank. "It restores confidence in the overall reform effort."


Speaking in his roomy office at the State Property Committee, where he has been deputy chairman since 1992, Mostovoi said his role would be to bring things back to normal.


"Our main task is to recreate the normal process of privatization, to eliminate the violations which were allowed on Polevanov's watch," he said. "The main priorities of privatization are already defined in the program that was adopted by presidential decree, and we will be returning to them."


But State Property Committee bureaucrats are still holding their breath. Spokesman Igor Plotnikov said Mostovoi's appointment as acting chairman "does not remove the question of who will be the next (permanent) chairman. We, like you, are waiting to see who it will be."


Some critics of Chubais' program painted Mostovoi as a compromise figure who would be open to moderating the course of privatization.


Sergei Ivanenko, a member of the Duma Privatization Committee, said he and Mostovoi had worked with the Moscow government on a privatization plan under which officials could impose certain demands -- such as the preservation of jobs -- on owners of privatized firms.


He said Mostovoi would support a "slower, but more effective" approach to privatization.


Mostovoi refuted that claim. "Slower, no. More effective, yes," he said. He refused to discuss the Moscow plan on the record, but Plotnikov said that while Mostovoi had "participated" in it, it was not clear that any of his recommendations had been adopted.


Mostovoi said change was needed to "perfect" the federal sell-off program, but called for speeding it up, not slowing it down. He said privatization of machinery, buildings and land should occur simultaneously in the current, second stage of privatization. Local governments, such as Moscow's, favor postponing the sales of land and property.


"His appointment is not a compromise at all. It is a hard blow to those who supported Polevanov," said Mstislav Afanasyev, an economist at the Center for Economic Reform.


Afanasyev said Mostovoi fought government subsidies for industry first as deputy to Chubais and then to Polevanov. In that post, he was responsible for the privatization of fuel and gas companies, transport, communications and heavy industry, Plotnikov said.


The view of Mostovoi as a Chubais-style reformer was shared by Privatization Center spokeswoman Lena Shchalnova and Vartan Ovsepyan, a government spokesman.


Mostovoi said he would set about repairing the damage done by Polevanov. "The decision-making process on privatization came to a halt, the normal working relationship between the State Property Committee and the State Property Fund were disrupted."


It took just seconds to reverse Polevanov's ban on foreigners entering the committee headquarters, a policy that had bent many noses out of joint: A foreign reporter was whisked upstairs with smiles and friendly greetings.


"Many people in our country think the government acts as a manager," said Mostovoi, laying out his views in a leisurely way. "That is a misconception. The government cannot manage companies. Only entrepreneurs can do that."




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