Privatization Update: Is It More Than Just Paper?
Russian Vouchers' Ups & Downs
By Charles R. Sauer

Following weeks of confusion and cynicism which had accompanied the initial issue of Privatization Checks (more commonly called "vouchers") by the Russian government in October, recent trends on Russian stock exchanges suggest that the Checks are enjoying a significant improvement in their status. The market value of the Checks is increasing, and such growth is likely to continue. Thus it seems that at least the more entrepreneurial members of society are taking the notion of privatization more seriously than they did at the start.

When Russian banks began issuing Checks many people were confused not only about who was eligible or how to receive the Checks, but also about the whole idea of privatization and how the Checks were to be applied in practice. It is the hope of the Russian government that the Checks will be used by private citizens to buy a stake in state enterprises that stand to be sold off in the months ahead. The goal is to convert over 35,000 enterprises into joint-stock companies by the end of 1995 with 70% of their assets held by independent investors. Vouchers were distributed to the entire adult population at a nominal price. Even among those who understood the intent there was widespread cynicism about the program; many felt that the government would never follow through with supporting legislation to make the Checks worth anything near their face value of 10,000 rubles. In October, one conservative deputy in the Supreme Soviet attacked Anatolii Chubais (deputy minister for privatization) during a televised session, shouting into the microphone, "It's only a piece of paper! What good is it?"...

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