What is a concession?

Ekaterina Ermolaeva
Ekaterina Ermolaeva
May 15, 2015
What is a concession?

The word "concession" came to us from the Latin language: from the word "concessio", which means "assignment", "give in". What is the meaning of this term in Russian?

  • A concession is a special contract that allows one state to use land, plots, and natural resources of another state. The goal of the state that gives a concession is to restore its economy, to get an impetus to the development of these lands or natural resources. The goal of the person who takes the concession is, of course, to benefit from the resources that he does not have on his territory.
  • Also, a concession is a method of using state assets — cash, land, and others — in which a greater percentage of the profit goes to a private entrepreneur. This is a kind of rent, and sometimes privatization of state assets. For example, under a concession, it is very profitable to engage in farming, or to rent a railway, to extract minerals in a certain territory.

You have learned what a concession is.