Privatization in Russia, its foundations

The events that took place in Russia in the early 1990s led to changes that affected changes in property rights. The country began privatization of state and municipal property.

Privatization means the transfer of property owned by the state into private hands, for a fee or free of charge. Privatization in Russia was in full swing. Its main legislative base was determined by the Law on Privatization. Special committees were organized, which were engaged in preparing the necessary documents and assessing property, as well as organizing auctions. The property funds sold the organizations and their shares.

Denationalization and privatization in Russia were based on the principles of equality of each buyer and absolute transparency of this process. All this was a forced measure in the transition to a market economy. At that time, joint stock companies were widely spread in the country. With this form of transformation of the enterprise, its employees received priority privileges for the privatization of property. Shares were distributed between them on a free basis.

In 1992, voucher privatization became widespread in Russia. Each citizen of the country was given a free coupon, which gave the right to purchase a part of the property of any enterprise. This measure allowed preserving the principle of equality between different social strata of society. Every citizen has the opportunity to buy part of the property on equal terms. The second plus of free distribution of vouchers was the acceleration of the process of privatization of state and municipal property. This privatization model was applied not only in Russia, but also in Romania, Poland and Czechoslovakia.

Privileged privatization in Russia provided for the provision of discounts to certain categories of citizens. There was also a return of property to the owners and their heirs, who were illegally deprived of it in previous years. This process was called re-privatization.

Sometimes, initially there was formal privatization, which provided for the transfer of ownership into private hands. At the same time, there were no significant changes in the structure of the enterprise or its fixed assets. This was a preparation for the implementation of material privatization.

Real privatization in Russia took place through the sale of state property in private hands. This process was carried out through auctions and tenders. The tender was held in open form or with a limited number of investors. This method allowed to attract a large number of potential investors. Their choice was carried out not only in terms of price indicators. A number of other factors have a priority. For example, a significant inflow of capital was a decisive factor.

When selling the object of state and municipal property through an auction, the main criterion was the proposed value. Other factors did not matter much. The enterprise was sold at its real market price, which was very important at this stage. In addition, this form of sale has reduced the number of cases of corruption. At that time, other methods of privatization would generate massive bribery related to the sale.
The facts of direct selling directly to a specific investor took place. This was done taking into account the importance of this investor. With this method it was necessary to correctly determine the real value of property.

Privatization in Russia went on at a rapid pace. Her organization had its pluses and minuses. Only now it is possible to really determine its scale and reveal all the inaccuracies.