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.
Last week, Belarusian Foreign Minister Makei participated in the foreign ministers’ meeting of the Eastern Partnership and Visegrad Group initiative hosted by Warsaw. The Belarusian FM emphasized Belarus' interest in cooperation in the transport sector, which could be due to Belarus’ desire to export electricity surplus after Belarus finished construction of the nuclear power plant in Ostrovets. Minsk expressed concerns about Warsaw’s stance on the Belarusian NPP, as it refused to buy electricity from Belarus and supported Vilnius’ protest on this issue. Following accusations by the Belarusian leadership and the state media against western states, including Poland, of training "nationalist militants", Minsk did not agree on the visit of the European Parliament deputies from Lithuania and Germany to Belarus and to the NPP construction site near Ostrovets in particular. In addition, the Belarusian authorities have stepped up efforts to enforce education in Russian in Polish-language schools in Grodno and Vaukavysk. Should a rift in Belarusian-Polish relations persist, the Belarusian authorities are likely to step up the pressure on the Polish-speaking minority in Belarus.