Image caption Selling oil firms is widely seen as tantamount to flogging the family silver

In an effort to deal with a mounting budget deficit, the Russian government has launched a plan to sell shares in state-owned companies.

So far, Russia's finance and economic development ministries have agreed on about a dozen companies that will be put on the block, and they are eager to stress that they are only planning to sell minority stakes.

But the initiative has already sparked controversy.

Following the bungled sell-off of state assets during the 1990s - and the creation of Russia's powerful, though unpopular oligarchs - the country's people are deeply suspicious.

Russia's largest oil company Rosneft and banking giants Sberbank and VTB have been mentioned as potential assets for sale.

Government officials say they hope to raise about one trillion roubles ($33bn; £21bn) over three years, but some experts believe it is a conservative estimate.

"If everything is sold at current market prices and at what can be called the fair value of non-public assets, the state could get much more than $30bn," says Vladimir Kuznetsov, an analyst at Unicredit Securities.

Economics commentator Maxim Blant at news portal newsru.com believes that demand for the minority stakes will be high, including significant interest from abroad.

But the reality is, much will depend on the execution of the sale, expected to be prepared during the autumn and take place from 2011 till 2013.

"While comparisons with the botched privatisation process of the early 1990s are misplaced, genuine concerns with regard to implementation remain," says Neil Shearing, senior emerging markets economist at Capital Economics.

Unpleasant memories

After the collapse of the Soviet Union, the Russian government took decisive steps to create a culture of private ownership.

Image caption Russia's largest oil company Rosneft has been mentioned among potential assets for sale

And while all Russians living in municipal flats got a right to become their owners for free, it was not that simple with once state-owned companies.

Many still see the 1990s privatisation of companies, including oil and gas firms, as a heavily discounted sale of national wealth to a bunch of close friends and relatives, creating the infamous oligarchs.

For years, more than half of Russians have favoured full or partial revision of the 1990s privatisation result, blaming the Boris Yeltsin administration for how it was executed, according to different surveys.

Despite the privatisation processes' bad image in the country, the current government, which has been extremely sensitive to people's mood in order to avoid social discontent, might be able to deliver a fair outcome thanks to changed conditions and because they have learned from the last experience.

Mr Blant says that Russian officials have recently organised several successful events of this kind, including raising $5.5bn (£3.5bn) in April in Russia's first international debt sale since it defaulted in 1998.

In terms of "selling" the idea of the new privatisation drive to Russians, the government would hugely benefit from articles in independent media outlets and analytical reports praising it for a profitable assets sale, says Mr Kuznetsov.

Also, the government will be eager to stress that it is retaining controlling states in all of the companies, Mr Blant notes.

Profit distribution

But who will be the buyers of the minority stakes?

Analysts agree that it is highly unlikely that the government will be banking on consumers investing in Russia.

So called "people's IPOs", which took place four years ago and saw shares in companies such as Rosneft and Sberbank sold to the public, were heavily promoted by the officials.

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But they did not make many people happy, as their hopes of becoming wealthier did not materialise - not least because of the subsequent financial crisis.

"I really hope there will be no new people's IPOs any more - at least, until the public's financial literacy increases dramatically," says Mr Kuznetsov.

Mr Blant believes that there will be a lot of interest from the likes of pension and mutual funds "which specialise in minority stakes" in order to participate in profit distribution.

Fair value

While there is a consensus that the plans to sell stakes in state companies "is clearly good news", experts do not see it as a fundamental policy shift, which will reverse the 2000s trend of increasing the state's presence in the Russian business.

"Despite President Medvedev's commitment to strengthening investor protection and property rights, there has been little in the way of concrete reforms in this area," Mr Shearing says.

Mr Blant points out that the government plans to invest more money in the economy in 2011 alone than it is going to raise by selling the state assets in the next three years.

So the government could potentially be able to sell the assets at good prices, though officials will have to do more to achieve their aim.

"The state will need to work at increasing the investment attractiveness of some of the assets in order to sell them at the fair value," says Mr Kuznetsov.

Favourable global market conditions and a competent execution could help the Russian government to raise the necessary billions.

But there is still a lot to be agreed on and done in order to succeed.

As the idiom states, "the devil is in the details".