Government drafted a list of enterprises for privatization worth USD 2.5 billion

April 22, 2016 18:02

Without changing the fundamental approaches to privatization, its results in 2012 will not much differ from 2011. In 2012 there will be one or two major deals in favour of the Russian capital, and a couple of dozens in favour of domestic investors.

The Belarusian Government has drafted a list of companies worth at least $ 2.5 billion to be sold this year in order to fulfill its commitments vis-?-vis the ACF of the EurAsEC. In the near future the list will be submitted to Alexander Lukashenko. The Belarusian authorities plan to put on sale in 2012 state shares in 133 enterprises including 83, which were not sold in 2011. In 2013 22 companies will be put on sale: the list of 13 included in a three-year privatization plan was amended with nine new companies.

During an enlarged meeting of the collegium of the Ministry of Industry on 2 February Deputy Prime Minister Sergey Rumas criticized the work of the State Property Committee and other government agencies, both regarding the pace of privatization and its management by the governmental agencies. Rumas said, the results of the sales of state owned stakes in 2011 (state owned shares of 34 enterprises were sold) were “disappointing, and even disastrous”. Criticism of the Deputy Prime Minister is both legitimate and routine, designed for external consumption: Lukashenko has the full authority in terms of decision making regarding large property privatization.

Foreign investors will be put off by the image of the country’s authorities, poor business climate, as well as by significantly inflated prices of assets.

The companies not sold in 2011 will face similar fate in 2012 by the virtue of their general unattractiveness to investors and inflated prices for their assets. At the same time, under the requirement of compulsory privatization worth USD 2.5 billion, Russia will once again buy the best assets. Most likely, the pool of shares to be sold will include shares in oil refineries and petrochemicals, banks and telecommunication enterprises. Chances of a sale of shares of MAZ or Belaruskali seem low.

Since USD 2.5 billion is not enough to pay the debts while maintaining internal macroeconomic balance, and the new loans in 2012 are hardly probable, internal privatization will prevail. Large enterprises and chains will buy small business in the real and retail sectors. Either Russian or nomenclature capital will be behind these investors. In any case, with the redistribution of property internal tensions within the elites, in particular in the regions where the executive branch “fights” against the security forces, will increase.

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