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Eastern Europe
May 10, 2019 www.intellinews.com I Page 20
Hegemony of state in Russian economy deepens, warns watchdog
The process of the strengthening of state's role in the economy has switched gears, as the state is no longer simply setting the rules of engagement, but attempts to regulate the whole economic system of the country, Federal Anti-Monopoly Service (FAS) watchdog warns in a report on competition in 2018.
The new trends are evident on both federal and regional levels, where authorities are interfering in local business relations and engage in regional protectionism.
FAS reminds that before the 1998 crisis the state's share in the economy was estimated at about 25%, growing to 40-45% by 2008, and exceeding
50% in 2013. FAS assumes that in 2017-2018 the share of the state in the economy already exceeds 60-70% of GDP. FAS’s share of the state in the economy has proven controversial and remains the subject of debate amongst economists.
"In many regions we see what I would call economic feudalism, in which there is no private sector, no capitalistic relations, but vassals
and lords - the state apparatus, which meddles in private business affairs," Vedomosti daily reminded of the controversial remarks made by the head of FAS Igor Artemyev in October 2018.
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Ukraine's gas monopoly files claim against Russia's Gazprom with European Commission IntelliNews Pro
Ukraine's natural gas monopoly Naftogaz has filed a complaint with the European Commission about the anti-competitive behaviour of Russian Gazprom, according to Naftogaz's director Yuriy Vitrenko.
"In this way, we will be able to make natural gas cheaper for Ukrainians," Vetrenko wrote on his Facebook page on May 6, explaining this will become possible by providing access to Ukraine’s gas transit system to EU-based buyers, as well as to Russian independent suppliers, by enabling gas to be traded at the Russian-Ukrainian border.
Currently, Gazprom is selling all its natural gas passing though Ukraine exclusively on the border between Ukraine and EU countries.
"In this claim, we analyse in detail how Gazprom is abusing its dominant position (on the EU
market) and restricts competition," Vitrenko wrote, pointing to the planned launch of Nord Stream 2, the blocking of virtual reverse and the Russian firm's control over EU-based traders as its key instruments of influence.
Alexander Paraschiy at Kyiv-based brokerage Concorde Capital believes that if Naftogaz’s new initiative forces Gazprom to sell its natural gas to EU-based traders on the Russian-Ukrainian border, this will become a real breakthrough.
"In such case, Naftogaz will not need to deal with Gazprom at all anymore, enabling EU-based traders to purchase Russian gas and transport it through Ukrainian territory themselves, as well as selling such gas to Ukrainian consumers,"
he added in a note on May 7.