Privatization in 2012 will be secret and non-transparent
There is neither a list of enterprises subject to privatization this year in the public domain, nor information about negotiations that are already ongoing, which implies secret and non-transparent nature of the privatization deals. All transactions will be prepared in secrecy and finalized by restricted decrees of Alexander Lukashenko.
The Belarusian authorities have added the government’s stake in mobile operator MTS to the list of companies to be put up for sale in 2012 in order to gain USD 2.5 billion by the year-end.
The sale of the governmental property worth the aforementioned amount is one of Belarus’ commitments vis-?-vis the Anti-Crisis Fund of the EurAsEC.
Neither the list of enterprises has been made public (in fact, the government acknowledges that it has not yet been completed), nor there is information about the ongoing negotiations for the sale of companies (usually such negotiations last six months to a year), which means that privatization will be of a non-transparent and secret nature. Before the end of the year the government will try to stall for time and haggle. For example, Russian investors are prepared to pay USD 500 million for the MTS, while the Belarusian authorities insist on USD 1 billion. Closer to the end of the year when time will come for Belarus to fulfill its commitments, it will start selling enterprises via presidential decrees. In any case, it is not enough to sale the MTS only. According to our estimates, Belarus will not return a USD 1 billion bridge loan to Sberbank of Russia and the Eurasian Development Bank taken at the end of 2011. Accordingly, the pledged majority of shares of Naftan will become the property of creditors. Since this would still be not enough, the country could sell the whole package of shares of Naftanand one or two companies on top of it. All transactions will be prepared in secrecy and finalized by restricted decrees of Alexander Lukashenko. Privatization in favor of domestic investors will never bring significant amounts of cash into the country as no Belarusian businessman has such funds. Domestic privatization will take place however 1) it will not be on a mass-scale, 2) strategic enterprises will be sold to the most solvent customers, that is, to Russian investors.
The country's leadership has instructed the local authorities to raise minimum wages at enterprises by the end of 2019 to BYN 1,000, which would lead to an increase in the average wage in the economy as a whole to BYN 1 500. The pace of wage growth in 2017 is insufficient to ensure payroll at BYN 1000 by late 2017 without manipulating statistical indicators. In order to fulfil the president’s order, the government would have to increase budgetary expenditures on wages in healthcare and education, enterprises – to carry out further layoffs and expand the practice of taking loans to pay wages and restrict investment in modernisation of fixed assets. In 2010, the artificial increase in wages led to a threefold devaluation in 2011, an increase in the average salary to BYN 1500 will not match the capabilities of the economy and would lead to yet another devaluation.