Faced with an economy under pressure since the start of the conflict in Ukraine and deprived of Western capital, the Kremlin is seeking to stimulate domestic private investment, improve the efficiency of state-owned enterprises and, above all, boost tax revenues. War is expensive, and Moscow is exploring every avenue to finance its military efforts without adding too much to its debt burden.

"We have proposals for major privatizations," said Finance Minister Anton Siluanov at a meeting with Rosimushchestvo, the federal agency for managing public assets. "In our opinion, the time has come to put this issue back on the agenda."

A sea serpent of Russian economic policy

The idea is not new. Back in 2010, under the leadership of Alexei Kudrin, the Ministry of Finance launched a vast privatization program. However, the project gradually stalled, and only the sale of a stake in oil giant Rosneft really came to fruition.

More recently, at the end of 2023, Anton Silouanov proposed to relaunch these asset disposals by submitting to the government a list of 30 major state-owned companies that could be partially privatized, while maintaining a majority state shareholding. The aim was to limit pressure on the domestic debt market.

So far, however, no major transactions have materialized, and the list of companies concerned remains confidential. Andrei Kostin, Chairman of VTB Bank, nevertheless mentioned strategic companies such as the Transneft oil pipeline, Russian railways and the national post office as possible candidates.

According to Russian news agencies, Deputy Finance Minister Alexei Moeyev said that the 2023 list was no longer relevant, and that discussions were now focusing on seven major companies, with sales scheduled to take place by 2026. The government hopes to make between 100 and 300 billion rubles ($1.23bn to $3.67bn).

Mosesev was evasive about the sectors involved, pointing out that some of these companies are not listed on the stock exchange and that investors will need time to assess their value.

But beyond traditional sales, Moscow also seems to be banking on another source of revenue: judicial seizures. Anton Silouanov has announced that privatizations will accelerate through the sale of assets seized by the state. "By 2025, revenues from the sale of these assets should reach at least 100 billion rubles," he said.

Since the beginning of the year, Russian courts have ordered the transfer to the state of several strategic enterprises, including a major grain trader, Moscow's Domodedovo airport and large-scale logistics warehouses.

A wave of nationalizations that has business circles worried. Aleksandr Chokhin, president of the powerful RSPP business lobby, expressed concern at the continuing uncertainty and lack of guarantees for dispossessed owners.

At the same time, Rosimushchestvo has taken under its wing numerous assets previously owned by foreign groups and unilaterally seized by Moscow over the past three years. These include the Russian subsidiaries of Danish brewer Carlsberg and French dairy giant Danone.

Against this backdrop, the privatization program looks less like a desire for economic liberalization than a pragmatic maneuver to replenish state coffers, even if it means juggling controlled sales and opportunistic confiscations.