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.
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.