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.
According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.