Nizhny Novgorod, Feb. 16 -- On a visit to Nizhny Novgorod, the economic reform center of Russia, Prime Minister John Major announced a new project to develop capital markets in Nizhny Novgorod and endorsed a pioneering initiative in agrarian land privatization. The capital markets project is part of a major Know How Fund scheme extending to Nizhny Novgorod, Ekaterinburg, Perm, and St. Petersburg. At the request of the Nizhny Novgorod authorities, the Know How Fund and IFC will strengthen the local securities market for recently privatized companies. The Know How Fund and IFC will establish a third-party shareholder registrar to increase the market's reliability and efficiency, train stock brokers and dealers, and undertake a public offering of a local company. This public offering will be a pilot designed to demonstrate the potential for Russian companies to raise long-term financing through local capital markets. More than 300 companies in Nizhny Novgorod have been privatized since 1992, creating 300,000 new
shareholders. These privatized companies and shareholders are a foundation for a small local securities market. "An efficient and reliable securities market is urgently needed to capitalize on the initial success of Russia's privatization program," stated Edward Nassim, Director of IFC's Europe Department. During his visit to Nizhny Novgorod, the Prime Minister witnessed the trial auction of agrarian land on the former state-owned farm, 60th of October. Six farms in Nizhny Novgorod are part of a pilot to create new private farms and agricultural businesses by dividing state and collective land and assets among farm residents. Boris Nemtsov, Governor of Nizhny Novgorod province, characterized the pilot as "a working model for all of Russia." (more) Press Release No. 94/58, page 2 of 2 Nizhny Novgorod was the first Russian region to privatize state-owned enterprises. In 1992, the regional authorities began the process of economic reform with the privatization of small-scale enterprises by public auction. This
method of privatization became a model that was replicated across Russia. IFC, a member of the World Bank Group, is the largest multilateral source of financing for private sector projects in developing countries. In addition to IFC's technical assistance efforts, it has invested $94.5 million in private sector ventures in Russia.
