It is still early to attribute credit for the wide-ranging changes now occurring in the Russian steel industry to policies of President Vladimir Putin and his government. For one thing, the eradication of corruption within the government is still in its early stages. For another, the Kremlin has so far adopted a hands-off policy towards the conflicts which the consolidation process has triggered. In the months that remain before Putin faces reelection in March of 2004, the Kremlin is unlikely to do anything that will change the status quo. After the reelection, there is no telling how the president will deal with the major sector leaders. The most active signs of Putin policy can be seen instead on the margins of steelmaking activity, where administrative measures are easiest to implement. These include revising rail tariffs and eliminating corrupt discounting of freight rates; in decriminalizing the scrap metal sector; and in redirecting the flow of metal exports through Russian ports, instead of the Baltic states and Finland. Reform and recentralization of electricity tariff fixing is likely to take place, but only after the presidential election next year.
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