May the Highest (Non-American) Bidder Win

Russia is selling off a big chunk of its state enterprises and expects to get around $29 billion in return, although this is just an early estimated number. What caught my eye isn’t that this is such a huge numebr. It’s really not. It’s that Russia wants Asia to buy these stakes, not the US or Europe. Here’s the money quote from Economic Development Minister Elvira Nabiullina: “I would be oriented toward Asia, and not the U.S. or Europe. Maybe China or India.” From the Moscow Times…

The government is counting on foreign investors to help it privatize an estimated $29 billion in assets to reduce the state’s “excessive” presence in the economy, Economic Development Minister Elvira Nabiullina said Thursday.

Stakes in 11 state-run companies will be offered starting next year, and the sales will proceed even if state revenues outpace expectations, Nabiullina said during a government meeting on budget plans.

“The $29 billion is an unrealizable sum for the domestic market,” Shestakova said. “So the Russian government will have to attract foreign investors.

“But I would be oriented toward Asia, and not the U.S. or Europe. Maybe China or India,” she said.

I think it’s some of that old “cold war” animosity peeking through. Russia doesn’t want Western companies sweeping in and taking ownership of their prized possessions. Less history with the East, though Russia has never forgiven Japan for beating the crap out of them in the Japanese-Russo War of 1905.

Tags: china, Europe, india, Russia, State Enterprises, US