Zee Beam News

The bankruptcy of oil company YUKOS is not the beginning of industrial nationalization in Russia, Russian deputy prime minister told the World Economic Forum in Davos last week. "There's no talk of nationalization or a greater government role in the economy," he said. The Russian government would continue its policy of collecting corporate taxes in full, Zhukov noted, confirming plans to tighten tax regulation. He reassured Davos forum participants that Russia was not questioning the results of privatization, despite the sale of Yuganskneftegaz - YUKOS's main production arm, which came under government control. Zhukov said the goal of Russia's administrative reforms were aimed at "minimizing the government's role in the economy." He believes the strengthening of the country's economy would allow Russia to protect itself against sharp fluctuations in oil prices. If the price of oil dropped to $15 per barrel, this would not be a disaster for the Russian economy, Zhukov added. On the welfare reform replacing state privileges with monetary benefits, Zhukov said: "Reforms in the social sphere are just as needed and just as painful as the introduction of free pricing in the early 1990s." He also said Russia might complete talks on joining the WTO in 2005. Most likely, Zhukov noted, this would be done by December 25, when a WTO conference in Hong Kong is scheduled. "Russia sees itself as a democratic society and a country having a competitive market-economy," the deputy prime minister said, adding that "in recent years, Russia has not seen such massive market reforms as today." All those reforms, he stressed, had a single goal of improving quality of life in the country.