State Monopoly

The Moscow Times reports:

The state has rapidly increased its presence in the economy. Together with state-owned companies, its share in GDP rose from 35 percent in 2005 to 70 percent in 2015. The number of state and municipal unitary enterprises has tripled in the last three years alone, and they continue to appear in markets with highly-developed competition where their use of administrative resources and government financing poses a serious threat to other players. Such businesses have mushroomed at the regional and municipal levels, squelching competition in local markets.

The article continues:

The state’s expanded presence in the economy has deepened monopolistic tendencies in the “economic space uncontrolled by the state,” the FAS lamented.

Meanwhile, business people are unhappy with the status quo.

Nearly half — 48% — of respondents in a survey by the Russian Union of Industrialists & Entrepreneurs said that the authorities treat businesses like a “personal piggybank.”

As I have stated numerous times here on the blog, and on Twitter, this is the Russian system. The people complaining know that this is the system they signed up for. They have chosen to operate within it.

The FAS has proposed a plan to help resolve the situation, but it sounds like more state control rather than less:

Artemyev said that to combat monopolies and counterproductive actions by government officials, the FAS recommended focusing on a national plan for developing competition that is being prepared by order of the president. The FAS proposed setting economic indices as performance goals that governors and ministers would have to achieve or lose office.

Former Russian MP Dmitry Gudkov wrote:

What is wrong with the state corporation? First of all, it does not depend on the market. No profit, theft, inefficiency?

Its sole purpose, Gudkov writes, is to take more money from the state budget. The only thing the state corporations are doing is providing jobs for family members of their board members.


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