The new system of government-owned property management effectiveness indicators: First results

It was approved by the Russian Government Decree of 29 January 2015 № 72 in replacement of the indicators of public sector monitoring conducted by Rosstat since the early 2000s on the basis of the Russian Government Decree of 4 January 1999 № 1 (as subsequently amended on 30 December 2002).

The system of indicators for the assessment of government-owned property management effectiveness and putting together statistical monitoring includes 64 indicators grouped into the following five sections.

I. Structure of economic entities belonging to the government (with separate data on the Russian Federation and its subjects).

II. Management of joint-stock companies (JSC) the shares of which are federal property, as well as of federal state unitary enterprises (FSUE) and federal state institutions (FSI) (with 3 relevant sub-sections).

III. Privatization of federal property.

IV. Management of federal real estate items (with 2 sub-sections: on land and other objects).

V. Redistribution of federal real estate, in particular between public law entities of different levels.

Unlike the public sector monitoring held since early 2000s, the new system of indicators is filled by 3 government agencies in addition to the Federal State Statistics Service (Rosstat): the Russian Federal Treasury, the Federal Agency for State Property Management (Rosimushchestvo), and the Federal Service for State Registration, Cadastre and Cartography (Rosreestr).

However, the weightiest burden rests with Rosstat, which should ensure collecting information on 29 indicators representing an extensive set of data on the structure of economic entities belonging to the government, and on their management (most indicators in sections I and II). Rosimushchestvo is responsible for the indicators related to the use of federal real estate (7 indicators, including section V in full) and privatization (5 indicators), as well as 2 indicators related to state-owned joint-stock companies. The Federal Treasury, on the basis of budgetary reporting on federal budget implementation and accounting reports of federal budget and autonomous institutions, generates data on the main types of budget revenues fr om the use, privatization and sale of state property (9 indicators), as well as the condition of key assets of federal government bodies and the FSIs (3 indicators). Rosreestr provides information on the management of land in federal ownership (9 indicators).

By the beginning of 2016, the total of economic entities in government property, according to Rosstat, was 65.6 thousand units. It is more numerous compared to the latest semi-annual data fr om the public sector monitoring as of mid-2014 (63.6 thousand units). From the perspective of economic entity coverage, the new system switched to measuring all economic entities with a state share regardless of the share’s size (previously, belonging to the government sector required that the government’s share in the capital was more than 50%), while such an important element of the government sector as business entities, wh ere more than half of the capital is owned by business entities related to the government sector, is ignored. This makes it only partially comparable to the data of the previous years. However, for comparable categories of subjects, an increase in their number (institutions) or stabilization (unitary enterprises) was observed.

The bulk of economic entities in government ownership were institutions (56.7 thousand units, or 86.4%), among which there are institutions created by subjects of the Russian Federation, i.e. at the regional level (40.5 thousand units, or 61.7%), and institutions created by the Russian Federation, i.e. at the federal level (16.2 thousand units, or 24.7%). The two following categories of organizations are much less in numbers: the share of unitary enterprises (4.3 thousand units) was only 6.5%, while that of business entities (3.9 thousand units) – 5.9%. Other organizational and legal forms account for only 1.2% of all economic entities in government ownership.

In the structure of these economic entities, there were certain differences at the federal and regional levels. At both levels, institutions dominate, but their share is higher at the regional level (89.3% vs. 81.8% at the federal level). Among the entities in federal ownership, on the contrary, unitary enterprises have a little more weight (7.8% vs. 6.1%). But the greatest difference is in the share of all other economic entities (including business entities), the absolute number of which is comparable at both levels. At the federal level, their share is almost 2.3 times higher than at the regional level (10.4% vs. 4.6%).

While unitary enterprises owned by the subjects of the Russian Federation predominated quantitatively (2748 units vs. 1536 FSUEs), enterprises operating on the basis of the right of economic management were definitely prevalent at both levels, while the share of enterprises operating on the basis of operational management (or public enterprises) did not exceed 3–4%. Differences in the structure of institutions are more noticeable.

Among the institutions created by the subjects of the Russian Federation, budgetary institutions prevail (about 23.9 thousand units, or 59.1%), whereas among the institutions established by the Russian Federation, public institution are the most common ones (more than 12 thousand units, or 74.3%). At the regional level, public institution account for 30%, while the overall number is comparable. The smallest groups at both levels are autonomous institutions. However, at the regional level, because of both their absolute number (more than 4.4 thousand units), which exceeds the number of federal budgetary institutions, and their share (about 11%), they have occupied a certain niche, while at the federal level, the share of autonomous institutions is negligible (only 141 units, or less than 1%).

As for business entities, the information on them is available only for JSCs – the state participates in their capital at the federal level. Among 1557 such companies, in more than a half (816 units), the state’s share (over 50% of the capital) allows the government to carry out a full-fledged majority control. It turned out that the share of companies with minority government’s stakes was quite large (up to 25% of the capital) (567 units, or 36.4% of all JSCs). The companies wh ere the government had tools for partial corporate control in the form of a blocking stake (25% to 50% of the capital) and a special right to participate in the management (“golden share”) accounted for about 11% (174 units) and 5,7% (88 units) JSCs, respectively.

Summing up, one can note that the advantages of the new system of indicators are the transition to presenting data in terms of organizational and legal forms, which was not there in the previous public sector monitoring system of indicators, and greater emphasis placed on property and various types of state-owned assets. Significant shortcomings are data limitations on the level of subjects of the Russian Federation and a weak relation to measuring the state’s share in the economy, which the public sector monitoring did previously in the first place.

Georgy Malginov – PhD in economics, Head of the Ownership and Corporate Governance Department