Polevanov: Privatization's Newest Foe

All of a sudden, completely unexpectedly, it appears that one of the main achievements of three years of reform, privatization, is in danger. But what is even more surprising, the source of the danger is the State Property Committee, or GKI, the very agency charged with carrying it out.


It all began with the promotion, in November, of the creator and guiding spirit of GKI, Anatoly Chubais, to the post of first deputy prime minister. In exchange for his new, supposedly greater, authority, Chubais lost control over GKI and, consequently, over the nuts and bolts of privatization. This circumstance did not seem particularly alarming until it came down to naming his successor.


First, all of Chubais' efforts to have one of his deputies appointed -- either Peter Mostovy or Dmitri Vasilyev -- fell through. He was also unable to get President Boris Yeltsin to confirm Sergei Belyayev, who is now heading the state agency in charge of bankruptcy, and with whom Chubais worked closely in St. Petersburg. Yeltsin felt he needed to appoint someone from the provinces in order to "bring in some new blood."


It remains unknown who suggested to Yeltsin that he appoint the former governor of the Amur district, Valentin Polevanov, to the post. Before putting Polevanov in charge of GKI, Yeltsin had only seen him once. Moreover, the Amur district has not distinguished itself in any way in the area of privatization -- or in anything else, for that matter. It is obvious that someone in the president's administration was behind Polevanov's appointment.


In principle it doesn't much matter who helped this doctor of geology take control of privatization in Russia. The most important thing is that the new head of GKI clearly intends to introduce a wholly new policy to the privatization process. Polevanov asserts that the period of mass privatization is over, and the time for "fine tuning" has begun. In short, he intends to privatize new firms only in cases where not privatizing them is not possible.


Judging from his rare public appearances, Polevanov sees his main task during the second stage of privatization as "guaranteeing Russian national security." He is also convinced that privatization must be supplemented by nationalization. Recently on Russian radio, he said that privatization and nationalization are complementary concepts.


He went still further and spoke about certain enterprises that might be candidates for "de-privatization." These include some "wrongly privatized" enterprises in the aluminum industry, some in the energy complex and some in the military-industrial complex. It is in these areas that privatization has done harm to Russia's national security, he said.


This demagogic excuse for "revising" privatization may well find influential supporters in the Duma, the administration and, particularly, the Security Council. Council Secretary Oleg Lobov has long sought to include economic policy in his broad definition of Russia's security interests. Chubais' efforts to "correct" his successor's policies have led to nearly open conflict between him and Polevanov. Observers say that Polevanov recently remarked sarcastically that Chubais has apparently forgotten that he no longer works at GKI.


It seems clear enough now that Chubais was not so much promoted to first deputy prime minister as removed from his post at GKI. It appears that the Economics Ministry is the last refuge of Russia's economic reformers.