The Republic creates the normative and legal base for the economic reforms. For instance, the laws and normative acts on property, on budgetary system, tax holidays for enterprises of military and light industries were adopted and became effective, as well as the laws and normative acts on development of entrepreneurship and attraction of foreign investments, implementation of privatisation policy, depository system, state support to companies operating in certain sectors of the economy.

In June 1996, the State Council of the Republic of Tatarstan has adopted the State programme of social and economic progress of the Republic of Tatarstan which covers the basic trends of financial, monetarycredit, investment and structural policies, scientific and technological progress, institutional measures, agrarian policy and development of land market, foreign trade activity, interregional links, social sphere, ecology. Many measures envisaged by the programme which relate to development of securities market, foreign trade activity, development of industrial export, attraction of foreign investments are already being implemented.

The alternative economy is growing stronger and stronger in the Republic of Tatarstan, as well as the structures necessary for creation of market economy. Privatisation continues its further evolution.

Over 1000 enterprises were turned private in the course of implementing the State programme of privatisation in the Republic of Tatarstan. Among them such companies as joint stock companies KamAZ (the first enterprise to become a joint stock company in 1990), Tatneft, Nizhnekamskneftekhim, Kazanorgsintez, Tasma, Nizhnekamskshina, Kazan Engine-Building Production Association, Kazan Helicopters, Chistopol Watch Factory "Vostok", Tatnefteprodukt, Tatstroy, Kamgesenergostroy, Tatnefteprovodstroy, Tatavtotrans, etc.

Up to 75% of industrial products are manufactured by privatised companies, and up to 80% of construction works are performed by privatised construction organisations. Trade turnover in nongovernmental sector made up over 80% (January­June 1996).

The second stage of privatisation which commenced in the Republic from August 1st 1995, has a qualitatively new character. It is based on transition from mostly free transfer (with the use of privatisation cheques) of state property towards its market sale.

Taking into account the fixed sociopolitical foundation of privatisation, its new stage shall provide the necessary conditions for formation of responsible (efficient) owners. At this stage, privatisation shall be aimed at accommodating the inflow of investments primarily through increasing the investment attractiveness of companies to be privatised, including the measures on their restructuring. Also created shall be the necessary conditions for acquiring by the interested persons of unprofitable enterprises for their restructuring and reprofiling; the special procedures for selling enterprisesdebtors shall be applied more often.

The new model of privatisation contains two key principles: investmentbased sale of enterprises and providing investors with the right to acquire controlling blocks of shares in privatised companies.

To attract major (strategic) investors, the sale of shares issued in the course of privatisation of joint stock companies shall be effected by blocks consisting of at least 25 per cent of their authorised capital in combination with "portfolio" sales of shares of the biggest enterprises, which is aimed at attraction of institutional investors (including investment, pension and insurance funds) interested in stabilising the activity and financial position of such enterprises.

The sale of shares still owned by the corresponding property funds shall be conducted in the nearest future, as well as the sale of the blocks of shares unlawfully fixed in the republican ownership or unlawfully transferred to the assets of holding companies established in the course of privatisation.

One of the top priorities is privatisation of land lots under privatised companies. In this field, the problem of dividing the right to own the land and the authorities of bodies of state power and bodies of local selfgovernment to regulate the issues connected with the land use shall be solved in the shortest possible terms. Soon there shall be determined the principles of dividing the land lots into ones of public significance and of commercial use (subject to sale), as well as the privileges, including the possibility for private enterprises to pay for land lots to be purchased by them in installments.

Since the situation on securities market is quite complicated which considerably hampers the attraction of investments, the government has made the decision aimed at recovering the economy through transfer of state blocks of shares in 9 biggest companies of the Republic into trust management of "Tatinvest­Ross" Fund, a subsidiary of the American investment company"Tatinvest". Among the companies there are leaders of the republican economy: AO "Nizhnekamskneftekhim" (33.9% in the authorised fund), "Nizhnekamskshina" (40%), "Tatarnefteprodukt­Holding" (62.9%), "Tasma" (80.2%), etc.

The balanced privatisation policy has lead to retaining the controlling blocks of shares of the most significant companies of Tatarstan with the Government of the Republic. Today, the state share has been transferred for management to "Tatinvest­Ross" Fund for the term of five years without the right to sell. Unlike the scheme of managing the shares used at pledge auctions of shares from the federal budget, the model of Tatarstan excludes the sale of securities. It is aimed at ensuring the growth in value of shares of republican companies which should lead to growth of investments in the economy of the Republic.