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Volgograd: Smooth Transition

International Business


Volgograd, a conservative factory and farm area, is in the forefront of privatization, in part because its old-guard governor is reluctant to alienate Boris Yeltsin. So far, some 200 big enterprises are moving through its privatization pipeline--more than in any other Russian area. With the help of the World Bank's International Finance Corp., the region has also been the first to issue stock certificates to new investors.

But even this obedient region is pulling away from Moscow's control. Bypassing conflicting privatization decrees from Moscow, local officials are setting some of their own rules. Meanwhile, some complain that federal levies on imported equipment discourage foreign investors. And Volgograd wants a bigger part of each tax ruble it collects.

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