Transformation of Enterprises in Russia1

Abstract

There have been dramatic changes in the world since 1990. Among all the changes, the transition from a command economy to a market economy has been one of the most important peace events of the 1990s. The developments after the fall of the Berlin Wall in 1989 and the dissolution of the Soviet Union in 1991 sharply accelerated this process of transition. The three important aspects of economic reform in transition economies (i.e., former socialist countries including Russia) are: (a) liberalisation, (b) privatisation and (c) globalisation. Privatisation remains a key step in the policies of transition economies to form a viable market-oriented economy. There are various methods of privatisation such as restitution, direct sales, equity offerings, management-employee buyouts and mass/voucher privatisation. This process of reform and privatisation has brought about a certain transformation of enterprises in Russia. Therefore, the coverage of our study is Russia, and the field study on informal sector was carried out in Moscow, its capital city. The study reported here examines the impact of economic reform, particularly privatisation, on enterprises in Russia, and draws lessons for India from the experience of Russia.