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Judging by the national leaderships statements, Russia centers on saving FTAs as an alternative foreign economic policy vehicle, should negotiations on accession to WTO stall. It is suggested to conduct analogous negotiations with other countries, too4. However, the record of such nations as China and Vietnam, which engaged in the APR integration process in the 2000s through FTAs, 1 As much as 70% of largest Russian imports (value-wise at the six-figured level of the Harmonized Commodity Description and Coding System) from New Zealand is formed by meat and dairy products. Russias partners may gain significant benefits in the investment sphere and in a number of sectors of the services sphere which has not earlier been regulated by Russias international obligations.

2 The TPSEP members currently are Brunei, New Zealand, Singapore, and Chile. Negotiations are under way on re-signing of the Treaty, due to the US, Australia, Peru, Vietnam, and Malaysia joining in.

3 Taiwan does not have effective agreements with the Forum nations, either, which can be ascribed to political reasons.;

however, Taiwan concluded similar treaties with Latin American countries that do not hold membership in APEC.

4 More specifically, Russia has already held first rounds of negotiations with Vietnam, Syria and Algeria on the issue of foreign trade with the Customs Union, completed the respective negotiations with Serbia and nearly finished those with Montenegro. http://news.open.by/economics/39815, 4 November THE ROLE OF FREE TRADE AGREEMENTS IN RUSSIAS CURRENT...

shows that negotiations on FTAs take place already upon the base of obligations fixed under WTO and comprise new obligations WTO+1.

The actual coincidence in time of completion of negotiations on accession to WTO with fine-tuning of the fresh Customs Union and building a single economic zone with a series of negotiations on bilateral FTAs has mounted pressure on the Russian negotiator team, for which, in all fairness, this was the first encounter with the above challenges ever. At the end of the day, the price for gaining the much-needed negotiation skills can become assumption of a number of permanent international obligations.

It seems that success in the process of bilateral negotiations with Far-Abroad countries on liberalization of trade and other forms of foreign economic activity necessitates their strict synchronization, in time and content-wise, with the process of accession to WTO, the dialogue with EU, and integration processes in the post-Soviet space.

1 An analysis of conclusion of FTAs in the context of Russias joining WTO will require a separate study.

RUSSIAN ECONOMY: TRENDS AND PERSPECTIVES THE NEW PRIVATIZATION POLICY TWIST Yu.Simachev In the autumn of 2010, the RF Government announced a new largescale program of big privatization. The ultimately approved Forecast plan of privatization of the federal property and main directions of privatization of federal property for 20112013 were developed with account of extension of the planned effective date of the Forecast plan of privatization, identification of a broader circle of government policy objectives in this area, and results of the federal executive bodies current work on optimization of the structure of federal property.

In the autumn of 2010, the RF Government announced a new largescale program of big privatization. The distinctive marks of the program became a unique for the history of Russian privatization time horizon of 5 years (20112015) and an impressive magnitude (some 900 corporations and enterprises, including the largest ones).

Generally speaking, the beginning of the new stage of privatization can be associated with the previous Forecast plan (program) of privatization of federal property for 2010 and main directions of privatization of federal assets for 2011 and 20121.

The discussion at the government level on objectives of privatization and its necessary instruments with emphasis on structural reforming and modernization of the economy had been quite vigorous until the spring 2010. Later, since the second half of the year in particular, however, the focus was increasingly shifting towards the privatizations role in formation of additional budget revenues. That became a consequence of growing doubts regarding prospects of Russian economys rapid postcrisis growth, increase in budget expenditures, including social ones in particular, and, as a consequence, the aggravation of the problem of budget deficit in the years to come.

The ultimate Forecast plan (program) of privatization of federal property and main directions of privatization of federal assets for 201113, which were approved by the RF Governments Resolution of 27 November 2010 102r, were designed with account of the planned effective date of the Forecast plan (program) of privatization of federal assets (from one to three years), proceeding from recent amendments to the effective Act on privatization and results of the federal executive bodies current work on optimization of the federal property structure.

The document tags privatization as one of instruments of attainment of objectives of the transition towards innovation sociooriented advancement of the economy.

The document also sets main government policy objectives in the sphere of privatization, as follows:

creation of conditions for attraction of extrabudgetary investments in development of joint stock companies on the basis of new technologies;

reduction of the public sector of the economy for the purpose of promotion and encouragement of private investors innovational initiatives;

1 The objectives of the public policy in the sphere of privatization of federal property comprise both traditional tasks and the conduct (continuation) of structural transformations in the economys sectors (previously, this objective was cited thrice in privatization programs namely, in forecast plans (programs) of privatization of federal assets for 2003, 2004 and 2009), shaping integral structures in strategic sectors of the economy (this particular objective was cited in the 2009 Forecast plan (program) of privatization), and creation of conditions for attraction of extrabugetary investments for development of jointstock companies.

As in the similar documents for 2007 and 2008, there likewise appeared a reference to the largest (backbone budget wise) federal property objects being subject to privatization, along with an 1.5 times increase in the volume of respective budget revenues whose aggregate amount in the 2010 Forecast plan (program) of privatization was set at the level of Rb.

18 bln., visvis 12 bln. set in the similar documents for 2008 and 2009.

The list of sectors (industry branches) in the frame of which privatization is planned was extended substantially. That was coupled with a largescale reduction of the list of backbone corporations and organizations (more specifically, at the expense of sea and river port terminals, and airports).

THE NEW PRIVATIZATION POLICY TWIST improvement of corporate governance;

encouragement of the stock markets advancement;

formation of integrated structures in the backbone sectors of the economy;

formation of the federal budget revenues.

Once compared with the previous Forecast plan of privatization of federal property for 201012, the recently approved privatization program comprises such tasks as (1) reduction of the state owned sector of the economy for the sake of promotion and encouragement of private investors innovational initiatives; (2) improvement of corporate governance; (3) encouragement of the stock markets advancement.

The adopted privatization program comprises two sections.

The first section lays out the governments fundamentals and premises, and privatization plans with respect to 10 largest companies that hold leading positions in respective sectors.

The group of companies wherein the Government is going to reduce its share in their capital by selling stakes of different size over next 5 years (20112015) comprises Rosneft, Rusgydro, FSK, Sovkomflot, RZHD, Obyedinennaya Zernovaya Kompaniya (OZK), Rosagroleasing, as well as VTB, Sverbank, Rosselkhozbank. At this point, it should be noted that the government must retain corporate control in nearly all of the above companies, and it is going to be mostly blocking and minority stakes that will be put on the market.

Concrete timelines and means of privatization of these companies will be set at the Governments level with account of the market juncture, coordination of the sales with processes of privatization of equity of companies of the respective sectors, and leading investment consultants recommendations.

Alongside the aforementioned largest companies that will likely to be privatized following bespoke patterns, other large privatization objects included in the Forecast plan became stakes in 8 companies (Apatit (Mrumansk oblast), Prosveschenie Publishers, Sibir aircompany, Arkhangel trawler fleet, Ulyanovsk automotive plant, Murmansk sear fishery terminal, Vostochy port (the city of Nakhodka), Almazny mir ( Moscow).

The second section comprises the list of objects planned for privatization in a routine order (114 SUEs, 844 JSCs, including 35 closedend ones, 10 Ltds, and 73 other federal property objects, including real estate, sea and river vessels) inn the same vein as it was done in the recent years.

The Forecast plan estimates the 201113 privatization proceeds at a maximum level of some Rb.

1 trln., with account of the market situation and providing the RF Government makes individual decisions on privatization of the largest companies with a high investment appeal. Without regard to the above, the 2001 privatization gains are estimated to make up just Rb. 6 bln, while those in 2012 and 2013 Rb. 5 bln. in each year.

In the meantime, it is fairly difficult to discuss soundness of the preset landmarks with regard to a concrete amount of privatization revenues to the federal budget. At the same time, it is worth noting that it was just once (in 2003) in the whole period of economic growth that the value in question nearly hit the Rb. 100 bln. mark, while thrice (in 200304 and 2007) this value was in excess of the volume of aggregate revenues from privatization (sales) and use of public property (ie. with account of dividends on statewoned stakes, rental payments, etc.). Plus, as it was earlier announced, the government might channel a faction of privatization gains in the form of investment to privatized companies, albeit so far it has not been clear to what companies and under which terms.

The problem is, how to make sure public assets are not sold at giveaway prices, for here lies a certain contradiction: in the times of economic downturns, the government indeed is tempted to get rid of its assets; however, adequate proceeds can be collected only under a favorable economic situation, while privatization gains are not a particular desideratum once the budget enjoys a surplus.

That is why, should the macroeconomic situation aggravate seriously (for instance, due to the a second wave of the crisis of the global recession), the implementation of the privatization program would be one big question mark. In any rate, privatization (due to the unrenewability of the source and onceandforevergone nature of respective transactions) is capable of ensuring just a temporary relief to the budget system.

The new privatization program for 201113 sounds very ambitiously as far as the structural component of privatization is concerned, with the declaration of it trumpeting an explicit inRUSSIAN ECONOMY: TRENDS AND PERSPECTIVES novation and modernizationoriented tune in the context of the task of reducing the public sectors share.

That said, it is necessary to bear in mind that identification of landmarks in terms of the degree of governments participation both in the economy on the whole and individual sectors is by itself a nontrivial exercise, given the public sectors small specific weight, as the official statistics suggests, its presumable concentration on lower levels of agent chains within concrete corporations, and a formally nongovernment nature of property rights for public corporations assets. As well, the fact that it is structures that had been the governments agents in implementation of anticrisis measures during the peak of the crisis which are viewed as probable privatization objects.

As noted above, the formation and implementation of the public privatization policy has recently seen the rise of two systemic priorities namely, structural and budgetary.

The former priority focuses on the medium term, is associated with creation of conditions for advancement of privatized companies, their reforming, and a substantial reduction of the states share in the economy.

The latter priority suggest a greater openness of privatization, attraction of a broader circle of potential buyers, including those from overseas, lowering barriers to participation in privatization, a substantial reduction of the magnitude of the nocash privatization (in the form of contributing with federal assets to jointstock companies, public corporations, other organizations authorized capital). In the light of implementation of this priority it is not that important to what degree the government really eases its control over large corporations (at least, in the short run) and whether they really receive investment resources for their development.

While appealing on the surface, implementation of the structural priority can see substantial risks as its concomitant, including, in particular:

Expansion of conditions for an bespoke approach to privatization of large state property objects, particularly due to the nascence of respective legislative procedures1;

Imposition of substantial formal and informal restrictions on outsider investors participation, creation of preferences for individual buyers2;

Retaining the governmental participation in managing large, formally private companies3 and, as a consequence, yet a greater opacity of governments interests with respect to them, the rise of yet a greater number of preconditions for substitution of public interests with narrowly specialized (whether departmental, or private) ones;

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