Privatization: conditions change
The authorities adjust the initial value of enterprises put up for an auction by the inflation index, implying they are not willing to apply any discounts. A precedent with the removal of a potentially interesting food enterprise from an auction implies that the nomenclature will intensify its efforts in the fight for access to property.
The initial selling price of stocks of enterprises will be determined by taking inflation into account, thereby partially reversing the effects of devaluation, which reduced their real price. The government ruled that the starting price of government property put out for tenders and auctions will be indexed by the price growth rate of manufactured goods (the Ministry of Statistics reports prices for manufactured goods in January - July 2011 increased by 58.8%). Moreover, the initial price of the stock will also include the amounts of authorized funds increases from the state budget. However these rules would not apply to state-owned enterprises put out for an auction before the new rules enter into force.
The authorities are trying to maximize revenues from privatization via indexing costs of assets in Br, due to the devaluation of the Belarusian ruble. Therefore, the authorities rely on the fiscal effect, while a natural reduction of the price of assets in foreign currency could stir up the interest of investors. The authorities prefer failed auctions to the sale of assets at a reduced price.
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.