¥Reform of State Enterprises and Cooperatives
–1988 Law on Cooperatives continued:
¥By August 1991 - 255,000 registered
coops with 6.5 million employees, 42 billion
rubleÕs worth of
output in first half of 1991
–November 1989 Leasing Law
¥Entire enterprise could be leased with
2/3 of workers vote in favor of such reorganization
¥Coop thus paid rent and depreciation
costs to its ÒstateÓ parents on equipment and buildings - high potential for profit and theft of state
assets
¥Coops could purchase equipment outright
with their earnings, result –> purchase
on the cheap from parent ÒstateÓ firms
¥Loophole for nomenklatura, directors and ÒmafiaÓ black
marketers, to end up owning such coop firms
¥Bribing workers with promises of pay
raises and job security to secure votes favoring
conversion
–1990 Law on Enterprises
¥Owner of enterprise had exclusive right
to choose management personnel
¥OK in Western firms, but in Russian
transitional context weakened the political
and economic positions of workers and strengthened those of administrators
and ÒmanagersÓ or the likely
new owners.