Russia: Shareholder Power To The People

It's a powerful idea that may finally put former communist nations firmly on the road to market capitalism: Give the people a taste of ownership, and they just may like it. That's what Czechoslovakian Finance Minister Vclav Klaus's hugely successful voucher program is doing. In the fall, Russia plans to distribute vouchers that can be exchanged for shares of ownership, and the Baltic nations are investigating vouchers as part of their privatization programs. In countries where powerful interests from local apparatchiks to entrenched managers are vying for control of industrial assets, it makes sense to spread ownership throughout the population. What once belonged to the people in theory can now belong to the people in fact.

The privatization of Russian state enterprises was officially launched by presidential decree on July 1. Beginning in the final months of the year, vouchers will be distributed, free of charge, to everyone. Their value is likely to be 10,000 rubles--about three months' wages--and they will entitle each citizen to obtain stock in newly privatized companies at auctions. The vouchers will be freely tradable, so some individuals may become big shareholders.

So far, the West has focused too much on pressing Russia to pursue monetary and fiscal discipline. That's a worthy goal. But making sure that government-owned enterprises pass into the hands of the people is even more important for the economic and political success of Russian reform. The voucher plan deserves to get more technical help in the form of marketing and training assistance from the West.

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