State firms a drag on economy : minister

Chandi Dharmaratne

MOSCOW, Sept 6, 2006 (AFP) – Russia’s Economic Development Minister German Gref lashed out Wednesday against state-owned companies which in his view had a “significantly negative” impact on Russia’s industrial development. “A significantly negative role is played by the state-owned companies, which try to boost their presence on the market by trying to swallow the most interesting enterprises.

This creates a high monopolisation of our markets,” Gref said in comments quoted by the Interfax news agency.

“The markets’ high monopolisation and great expenses connected to one’s emergence into the market are barriers on the way of industrial development,” Gref said.

“It is impossible to be competitive (abroad) if there is no developed competition within the country,” the minister added.

In one example of such a trend, earlier this year the state-owned Rosoboronexport weapons exporter began taking control of a number of Russian industrial assets, following the lead of gas giant Gazprom and the Rosneft oil producer, both the Kremlin’s strongholds in the gas and oil markets. In May, analyst Anders Aslund of the International Economy Institute warned against “the folly of renationalisation” in the English-language