The government prepares to sell oil infrastructure
First Vice-Prime Minister of Belarus Vladimir Semashko voiced willingness of the authorities to sell pipelines, following the sale of gas transport enterprise Beltransgaz to Russian Gazprom in 2011.
Prime Minister of Belarus Mikhail Myasnikovich coordinated with President Lukashenko a list of strategic enterprises to be put on sale in 2012 to provide for USD 2.5 billion from privatization in order to meet Belarus’ commitments within the ACF of the EurAsEC lending program, said the Head of the State Property Committee of Belarus Georgy Kuznetsov.
The government continues the intrigue with the privatization list-2012 attempting to stir up interest of the investors. At the same time, the Head of the State Property Committee said he “still has not seen the final version of the list, that the list was incomplete and could be amended”. Therefore neither Economy Ministry, nor the Council of Ministers are the main authors of the list and as a consequence, have any authority regarding privatization. According to Kuznetsov, there are 19 enterprises on the list with a book value of about Br 7 trillion (about $ 850 million). However, the enterprises will be privatized for their market value.
Kuznetsov refused to name companies appearing in the list, saying only that “it included strategic and liquid companies of Belneftekhim and of the Ministry of Industry”. Kuznetsov acknowledged that while compiling the list they faced with opposition from almost all Belarusian ministries. It also describes the attitude towards the privatization of directors of enterprises, local and central authorities. Even if the decision to sell an enterprise is made, the investor may face with hidden resistance and sabotage from the directorate and the relevant agencies (which is usually the case). Accordingly, in order to protect own interests, the investor will have to seek for protection and support at the highest political level.
Non-official sources say that the list includes the most liquid strategic enterprises of the country: Novopolotsk refinery, MAZ, BelAZ, MTS, oil pipelines, two breweries and Paritetbank. That is, the list contains assets that could be prepared for sale quickly.
The fact that the government is considering selling Druzhba pipeline has been confirmed by Vladimir Semashko. Deputy Prime Minister announced that the Government was assessing the effectiveness of the Belarusian oil pipelines and considering their further use or sale. Mr. Semashko said, the Belarusian oil pipelines had aging service life and some were not used at all, and noted that “we must remember about BTS, the BTS-2”. Semashko also said that the Government was negotiating with various buyers interested in purchasing Belarusian oil pipelines. Pipeline transportation is one of the most profitable industries of the Belarusian economy. For example, an enterprise “Gomel Friendship” is the fifth on a list of the most profitable companies during the first three quarters of 2011 with a margin of more than 50% (in foreign currency).
Therefore we have been proved right, saying that the privatization would be “targeted” i.e. strategic or profitable small businesses will be sold only to fulfill the obligations and to cover the current needs in the foreign currency (USD 2.5 billion or so, based on the needs, for instance, on the decision to increase salaries of public officials and/or state employees).
Most exclusively the buyers will be Russian private and public companies, as Russia now has sufficient leverage to cut off any other potential investors and ensure protection of their interests. At the same time, the row with the largest Russian private investor “Itera” (Alexander Lukashenko ordered to terminate the contract with them) shows the level of protection of investors, including Russian ones.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.