Inflated asset prices are the main reason behind the privatization auctions’ failure

April 22, 2016 18:21

To fulfill the ACF requirements Belarus has to raise USD 2.5 billion in foreign direct investment by selling state assets. As a rule, only enterprises in a bad financial condition or with numerous restrictions or those overpriced are auctioned. In these circumstances, it is difficult to count on massive inflows of direct investment.

On November 2nd, 2012 state-owned shares in MTS (mobile operator) were presented for sale.

The government has been trying to sell its stake in MTS for over a year. Out of forty-five invitations, only two counterparts replied. Moreover, one of the potential investors already has experience in Belarusian, but its financial performance could have been better. MTS’s parent company is interested in buying the stakes however it considers the announced asset’s price inflated (at least by two times in the primary potential buyer’s view).

An auction, scheduled for mid-December 2012 to sell “Negorely wax processing and hive plant”, demonstrates another extreme side of the Belarusian privatization policy. This venture, with poor performance and depreciated fixed assets is put on sale on terms of preservation of its structure and the number of staff in the following 5 years. This is an attempt to burden an investor with enterprises that the state is unable to cope with on its own.

As a logical consequence of such a privatization policy, the state privatization auctions are all the time either cancelled, or postponed. At the same time, mergers and acquisitions take place in Belarus. As a rule, assets are purchased by private companies interested in expanding their activities. Some private businesses enjoy favourable sales terms for some state assets.

Thus, the Belarusian authorities continue demonstrating a negative attitude to any capital other than from business circles close the government.

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The Belarusian authorities have launched a discussion on the moratorium or abolition of the death penalty under the pressure of Belarusian human rights activists and international community. Apparently, the authorities are interested in monitoring public sentiments and response to the possible abolition of the capital punishment. The introduction of a moratorium on the death penalty would depend on the dynamics in Belarusian-European relations, efforts of the civil society organisations and Western capitals.

In Grodno last week, the possibility of abolishing the death penalty in Belarus or introducing a moratorium was discussed.

The Belarusian authorities are likely to continue to support the death penalty in Belarus. During his rule, President Lukashenka pardoned only one person, and courts sentenced to death more than 400 people since the early 1990s. Over the past year, Belarusian courts sentenced to death several persons and one person was executed.

There are no recent independent polls about people’s attitude about the death penalty in Belarus. Apparently, this issue is not a priority for the population. In many ways, public opinion about the abolition of the death penalty would depend on the tone of the state-owned media reports.

That said, the Belarusian Orthodox Church and the Roman-Catholic Church stand for the abolition of the capital punishment, however their efforts in this regard only limit to public statements about their stance. Simultaneously, the authorities could have influenced public opinion about the death penalty through a focused media campaign in the state media. As they did, for example, with the nuclear power plant construction in Astravets. Initially unpopular project of the NPP construction was broadly promoted in the state media, and eventually, according to independent pollsters, was accepted by most population.