Putin prepares Russia for massive privatization drive

Russians protest against economic crisis
Russians protest against economic crisis

Russia's economic crisis is so bad that President Vladimir Putin is now hoping to sell stakes in some of the nation's most prized businesses to raise money.

Putin discussed the privatization plans with officials on Monday, saying the sales should be made quickly but not at "bargain basement prices," according to a government statement.

Strategically important companies should not be up for grabs, however, and the new owners should be based on Russian soil, he added.

Flagship airline Aeroflot, oil giant Rosneft and state hydroelectricity company RusHydro could all be considered for privatization, according to a government document released Tuesday.

The government currently owns a majority stake in each of these firms.

Economic development minister Alexey Ulyukayev said the privatization could not be put off any longer, but he said there was no reason to "panic," according to Russian state news agency Tass.

Russia is suffering from a double whammy of Western sanctions and collapsing oil prices. The economy shrank by 3.7% in 2015, making it one of the world's 10 worst performing emerging markets for the year.

The International Monetary Fund expects a further contraction of about 1% this year.

The government has been forced to slash spending. Official statistics show that over 20 million Russians -- roughly 14% of the population -- are now living in poverty. That compares with 16 million in 2014.

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