In accordance with part 6t, article 4 of the Federal Law “On the Fund for Promoting Reform of the Housing and Utilities Sector”, this Fund will function until 1 January 2012.
It is noteworthy that there are stylistic differences even between the full names of corporations and their abridged versions (e.g., GK “Rosnanotekh”, Goskorporatsiia “Rosatom”, Gosudarstvennaia korporatsiia “Rostekhnologii”).
See Article 3 of Federal Law of 17 May 2007, # 83 – FZ, “On the Introduction of Alterations in Individual Legislative Acts of the Russian Federation in Connection with the Adoption of the Federal Law “On the Bank for Development”.
As of the end of February 2008, only the Fund for Promoting Reform of the Housing and Utilities Sector was fully functional, while the other corporations were still in the process of formation with the various documents determining their practical activity being coordinated;
2) the broadening of the possibilities to carry out the “shadow” lobbying of various interests, the risk of opportunism in decision - making that could harm the achievement of strategic goals and consistency.
The creation of corporations results in a considerable change in the “balance of power” in the system of state administration, in the transfer of some important decision – making to the level of corporations which significantly increases corresponding risks, bearing in mind that the existing corporate activity regulation is insufficient32, that the adopted laws lack the norms dealing with bringing to light and settling the possible conflicts of interests in the process of corporations’ functioning, and that the norms concerning the relations between corporations and the state authorities are clearly too brief and incomplete;
3) the business community’s fears (and sometimes “hyperbolization”) of the possible risks caused by the activity of state corporations.
To a large extent, this problem is caused by the vagueness of the limits set for the activity of corporations and their growth, by the indistinctness of the regulations and criteria which should be applied when selecting objects for support, by the lack of clarity with regard to the principles for the corporations’ controlling and managing their property, as well as by the uncertainty of their further plans concerning the development of their activity and the principles for building relations with the business community;
4) the mistrust in state corporations on the part of civil society.
This problem is related to the insufficient regulation of the issues concerning the effectuation of state control over the activity of corporations, with the lack of efficient mechanisms of civic control over their activity, and by the insufficiently rigid requirements with regard to their transparency and openness.
At the current stage, it is sufficiently clear that, to a large measure, the potential of the created state corporations is determined by the Russian Federation’s contribution of assets, by the state corporations having been entrusted with important rights and functions, by their possibilities of flexibly using financial resources, by their administrative status, and by their already acquired experience (or skills). Each of these corporations ( may be, with the only exception of GK “Olimpstroi”) was formed by means of a considerable asset contribution on the part of the Russian Federation, although its structure (blocks of shares, property complexes, monetary means, etc) differed relatively widely from one case to another.
The crucial obstacle barring the way to realizing the potential of state corporations is the generally inadequate level of clarity with regard to the goals and principles of their activity and the procedures for decision – making. One of the potential advantages of state corporations consists in a much greater flexibility in spending the funds, and in widening the sphere of their use. However, these additional possibilities for decreasing the risk of abuse and / or the risk of irrational use of resources should be “balanced” by the introduction of transparent and sufficiently detailed criteria and regulations with respect to decision – making as well as of the adequate procedures for assessing the results of corporations’ activity. This looks especially important in the light of the fact that, on the one hand, some of the newly created corporations are beset with internal functional contradictions ( for example, between the not-for-profit nature of the corporations and the commercial character of the joint – stock companies managed by them), and, on the other hand, many corporations have come under strong and differently directed influence of various interested parties.
It should be noted that these problems cannot be resolved by simply strengthening government control over a corporation. On the contrary, in the absence of established criteria of assessing the activity of corporations, the audits and inspections themselves can become the instrument of pressure on the corporation and its management on the part of various interested groups (bearing in mind the lack of clarity in the matter of how the activity of a corporation should be assessed, or how one or other decision should be interpreted).
Yet another principal problem is the fact that the laws on the creation of state corporations establish the powers of their managerial bodies but do not define either the spheres or the forms of responsibility, toward both the State and the corporations, of the members of the corporations’ various managerial bodies for the decisions being taken, as well as for the achieved results of their activity. The laws on state corporations specify who and what bodies have the right to adopt the decisions on discontinuing the powers of the members and chairpersons of the said corporations’ supervisory councils as well as the powers of their one-man Only the Federal Law “On the State Nuclear Power Corporation “Rosatom” contains the norms envisaging the necessity of regulations. In accordance with Article 33 of this Law, the Corporation’s Regulations should be confirmed by the Government and should establish the procedure and the rules for implementing the powers and the functions entrusted to the Corporation, including the procedure for its interaction with the state authorities and the fulfillment of the RF President’s and the RF Government’s orders.
executive bodies, but they do not specify, even in the most generalized form, the “motives” for taking such decisions. This inevitably results in the “dilution” of responsibility for the results of a corporation’s activity, and in the vagueness of external motivations on the part of the managerial bodies of corporations.
It is very difficult to unequivocally assess the effects of the creation of state corporations because the typology of the established corporations is extremely diverse, while the principles and the procedures for their activity are still in the process of formation. But in any event, the reasonability of their creation is open to question: in some cases it is doubtful whether it is necessary to create a single separate subject as a vehicle for implementation of state policy, while in other cases the choice of such a form as state corporation seems to be not sufficiently justified.
Along with the new opportunities, state corporations bring about some considerable risks such as the further proliferation of the process of their creation; the “dilution” of the RF Government’s powers due to the vagueness of authority delimitation; the abuse, by corporations, of their position within the framework of their relations with business and the misuse of their status for obtaining additional functions, powers, and resources; the increasing opacity of the processes of coordinating and adopting important decisions at the level of corporations; the decrease in the quality of resource management in conditions of corporations’ insufficient controllability by the State and civil society. Also, it should be noted that the creation of state corporations has substantially increased the opportunities for fulfilling both departmental and personal ambitions.
The accelerated adoption, in the year 2007, of the laws on the creation of state corporations, including with the help of the supreme political resource, has made it possible to form a certain “preemptive” volume of powers and possibilities (or a potential) for resolving a number of strategic issues of Russia’s socio – economic development. Nevertheless, yet another issue is now becoming increasingly important – the issue of how rationally and efficiently this potential will be used: practically each corporation requires some substantial administrative resource to be engaged to enable it to function properly, to supervise its activity so as to ensure its consistence with the established tasks, to lower the risk on the development of the market economy.
In general, it could be noted that the high status and the resource potential of state corporations have not been balanced, as yet, by the completeness, clarity, and transparency of the institutional conditions of their activity. At present, the balance of advantages and disadvantages is negative rather than positive: the problems are already visible, but the advantages are yet to be shown.
In our opinion, in order to get a positive effect from the activity of state corporations and to reduce the risks, it would be advisable:
- as regards the created corporations, to strictly determine the place and the role of each corporation in the implementation of state policy, and to set limits aimed at curbing any irrational broadening of the scope and the field of their activity;
- to adopt concrete strategies and programs regarding the development of their activity, to determine procedures for assessing their efficiency and effectiveness;
- to achieve an adequate balance between the flexibility in resource spending and the legal correctness of decision – making, the development level of the procedures of state and social control, and the transparency of the results of corporate activity;
- to engage the factor of personal responsibility of the corporations’ heads for the results of their activity;
- bearing in mind the public character of the corporations’ tasks, to increase the membership of their supervisory boards by the inclusion of persons of high social repute, provided that this persons will not be representatives of any branches of state authority, or of the managerial bodies of state companies;
- to organize the conduct of regular social (independent) expertise of the results of the activity of these corporations with the corresponding reports being submitted to the RF President, the RF Federal Assembly, and the RF Government;
- to more strictly determine, at the level of federal legislation, the terms and goals of creating state corporations;
- to establish, as a mandatory precondition for the creation of any corporation, that the strategy of its activity should be mapped in advance, along with the substantiation of the impossibility to achieve the set goals by any other means, with the assessment of the risks present, and with proposals on all the possible mechanisms for their limitation;
- on the basis of generalizing the existing practice, to considerably expand and elaborate the norms of the Law on Not-for-profit Organizations in the part of state corporations, and, in so doing, to pay special attention to the issues of decision – making in corporations; to the implementation of managerial functions with regard to other economic subjects; to the issues of interaction with the bodies of state authority; to the issues concerning the controllability and transparency of the managerial bodies of corporations for the achieved results; and to the issues regarding the reorganization and liquidation of corporations.
Meetings of the government of the Russian Federation in April Goldin M. P.
At the meetings of the government of the Russian Federation the following issues were regarded among the most important: results of consideration of social and economic issues of regions of the Russian Federation development at the meetings of the Government of the Russian Federation; bill “On patent attorneys”;
bill on agreement ratification between Russia and Singapore to avoid double taxation.
*** At the meeting of the Government of the Russian Federation on 10 April the report of the Minister for the Regional Development of the Russian Federation “On results of consideration of social and economic issues of regions of the Russian Federation development at the meetings of the Government of the Russian Federation” was heard.
In 2006-2008 within the framework of the corresponding order of the Government of the Russian Federation the Ministry for Regional Development of the Russian Federation prepared the materials for consideration of social and economic issues of regions of the Russian Federation development at the meetings of the Government of the Russian Federation.
All in all social and economic development issues of 22 subjects of the Russian Federation were considered at the meetings of the Government of the Russian Federation.
As it is stated in the report, on the whole consideration of social and economic issues of regions of the Russian Federation development enabled to put into practice the mechanism for interaction of federal executive bodies with executive bodies of the subjects of the Russian Federation.
At the same time it should be acknowledged that the main part of orders of the Government of the Russian Federation was devoted to consideration whether or not it is possible to allocate or increase federal budget funds to finance some objects of capital construction. The problems of efficiency of structural and institutional reforms in education, health care and housing and communal services were not reflected in the materials considered within the framework of discussion of social and economic issues of regions’ development to full extent from the point of achievement of strategic goals of regional development.
It seems that complex inter-branch approach and securing of interaction of all federal executive bodies and executive bodies of the subjects of the Russian Federation concerned required more intent attention.