Alexander Lukashenko leaves the most interesting companies to non-transparent privatization
Lukashenko banned preferential sale of shares of 54 state-owned enterprises (for employees). Lack of minority shareholders increases the value of the privatized enterprises and also increases the control of Lukashenko over the deals. At the same time, it deprives Belarusians of participation in privatization, as well as destroying the stock market.
Alexander Lukashenko signed a decree that banned preferential sale of shares of 54 state-owned enterprises (for employees). The list includes such companies as the Belarusian Steel Works (BMZ), SvetlogorskProduction Association "Khimvolokno",
Baranovichi cotton production association, Krichevcementnoshifer, the Belarusian Cement Plant, Rechitsa metizny plant, Beltsvetmet, Minskvtormet with subsidiary unitary enterprises, Minsk Automatic Lines Plant named after P. M.Masherov, and SKB Camerton.
All more or less attractive enterprises were joint-stock companies with 100% of state-owned stock in 2011. The formal pretext - the shares of such enterprises would be sold to strategic investors, as well as to create large corporate structures. Thus, the Belarusian citizens were consistently and cynically denied the right to participate in the privatization of national assets both by a removal of the most attractive enterprises of voucher privatization (and its subsequent withdrawal), and deprivation of share repurchase of even the employees of the corresponding enterprises.
Absence of minority shareholders increases the value of the privatized enterprises, and increases the control of Lukashenko for possible transactions (as even the enterprises’ management will not have shares).
All this creates a great opportunity for shadow income in the case of non-transparent transactions (and all attractive companies in Belarus have been privatized during the backroom negotiations to date) and formalized by Presidential decrees.
Thus, there are new transactions with attractive assets in 2012 (both within the EurAsEC obligations on the loan, and also because of banal lack of currency in payment of debts), but their formal and informal terms will be determined solely by Lukashenko.
In addition, the concentration of shares in the hands of the state or a strategic investor negates the possibility to create a stock market.
A total of 38 companies’ state holdings of shares have been sold at auctions and tenders for more than 232.5 billion rubles ($ 28 million) and $ 2.5 billion in 2011.
Last week, Belarusian Foreign Minister Makei participated in the foreign ministers’ meeting of the Eastern Partnership and Visegrad Group initiative hosted by Warsaw. The Belarusian FM emphasized Belarus' interest in cooperation in the transport sector, which could be due to Belarus’ desire to export electricity surplus after Belarus finished construction of the nuclear power plant in Ostrovets. Minsk expressed concerns about Warsaw’s stance on the Belarusian NPP, as it refused to buy electricity from Belarus and supported Vilnius’ protest on this issue. Following accusations by the Belarusian leadership and the state media against western states, including Poland, of training "nationalist militants", Minsk did not agree on the visit of the European Parliament deputies from Lithuania and Germany to Belarus and to the NPP construction site near Ostrovets in particular. In addition, the Belarusian authorities have stepped up efforts to enforce education in Russian in Polish-language schools in Grodno and Vaukavysk. Should a rift in Belarusian-Polish relations persist, the Belarusian authorities are likely to step up the pressure on the Polish-speaking minority in Belarus.