Sell-Off Plan Lacks Incentives, Says Official

A senior State Duma official expressed hope Thursday that the parliament would approve a more investor-oriented version of the government's post-voucher privatization program when it reconvenes in October, and said that many factory managers may want to put off the privatization of their enterprises until then.


Sergei Burkov, chairman of the Duma's privatization committee, told a press conference that the current plan, signed into force by President Boris Yeltsin last week after the State Duma rejected a compromise bill, was only a set of guidelines that did not offer companies enough incentives to privatize.


"If I were a factory manager, I wouldn't privatize under this program because I wouldn't get the investment that I need," Burkov said.


He explained that although the program gives investors the right to buy and sell land -- a key sticking point with conservatives in the Duma -- it still offers too many privileges to the workers of an enterprise.


The current program offers a factory three privatization options, one of which gives workers a priority right to purchase a controlling interest in the company at market price. The compromise rejected by the Duma only gave the workers priority in purchasing up to 10 percent of the voting stock.


Burkov said several other points of the adopted program were weaker than those of the compromise bill. For example, the tax breaks initially promised by the government to investors and newly privatized companies were not made effective immediately, Burkov noted.


The government has been instructed by Yeltsin to submit a draft bill on the tax breaks to the Duma 15 days from now, but since the parliament is on vacation until October, the tax incentives cannot be approved until then.


Burkov said the program was voted down by the legislature last week because of a lack of discipline among pro-government factions, whose members are notorious for often missing parliament sessions.


Burkov, a moderate reformist from the New Regional Policy faction, had played a crucial role in working out the compromise draft of the privatization bill, which fell short of the Duma's approval by a mere 15 votes.


Though Yeltsin excluded most of the compromises from the plan he enacted last week, Burkov said the way the Duma and the government had worked together on the bill set a precedent of successful cooperation between branches of power.


"It showed that we can cooperate normally and work out compromises on such contentious issues as privatization," he said.


Burkov said Yeltsin's decree had not been meant to sideline the Duma, since it took into account some of the legislators' proposals.


"The decree is a political move, not a purely economic one," he said. "It was meant to show that Russia will keep following the path of privatization and not stop privatization as some factions had wanted."


Burkov said the only problem the supporters of the bill would face in October would be the "stubbornness" of the Agrarian faction, which fervently opposes the sale of land, a major point of the post-voucher program.


"We will hold a hearing on the program first thing after the recess," Burkov said. "And we will try to explain to the Agrarians that they will only benefit from it."


Burkov claimed that even without the Agrarians' support, the pro-government and centrist factions can amass the extra fifteen votes needed to pass the program if they act concertedly, though the nationalist and communist deputies will continue voting against it.


"That will show the radical factions that the stand they're taking is unconstructive," Burkov said.