Russia has put up US$30 billion (*S$53.27 billion) of state assets in the biggest privatisation scheme since the 1990s. The assets will be of 11 partly privatised state run firms, including Sberbank, the largest banking institution in Russia, and state-owned oil firm Rosneft. The state will retain its control of all of them.  

The Russian Railways has been removed from the list of firms approved by the government. The Finance Ministry did not rule out the possibility of privatising the assets of the railway and said that the sale of a minority stake in the railways would be delayed by two to three years.

Russia hopes privatisation will help reduce the burgeoning budget deficit after years of oil-driven surpluses. Military spending, education and debt service drove the budget deficit. Military spending is expected to increase 13 per cent in 2011.

Prime Minister Vladimir Putin said that this year’s deficit was likely to remain above five per cent of the gross domestic product (GDP). Russia’s GDP fell by 7.9 per cent last year due to the global economic crisis.

Privatisation will reduce the deficit in the short term but will also result in a decline of government revenue.

*Exchange rate correct as at 29 July 2010