header -->

Privatization: first deals

Category status:
April 22, 2016 17:55

On 14 June private Belarusian companies “Laguna” and “Ostamebel” bought state shares of the three furniture factories at an auction within the frameworks of the first auction of state-owned shares that were included in the privatization plan for 2011-2013.

There were nine companies at the auction however investors showed no interest in “Belkofe”, “Zhitkovichles”, “Factory of catering “Borisovles”, “Kostiukovichi LPH”, “Pleschenitsles”, “Polotskles”.

Comment

Privatization is the most painful issue for the Belarusian President. Open tenders offer businesses unattractive to investors, often at inflated prices (their book value, which ignores the real value of an enterprise). As a result, some companies are bought by Belarusian investors who can use the new facilities for their business. However, this kind of privatization brings neither foreign currency to the country, nor does it create a feeling of implementation of a full-scale transparent privatization of interesting assets in the country.

With regard to strategic assets, the Belarusian authorities have decided to procrastinate and to bargain until the end. Belarus did not agree to sell state-owned shares of the mobile operator MTS at a price proposed by investor (the difference between the desired and the offered price was 200-300 million). Negotiations concerning the sale of 50% of “Beltransgaz” are delaying and the authorities have decided to link the sale conditions of the company at initially inflated price of USD 2.5 billion to favourable domestic gas prices in 2012-2014. That means getting additional subsidies from Russia amounting to USD 5 billion.

On the one hand, the authorities are trying to play hard, hiding their weakness. On the other hand, their actions confirm the image of the country as of a partner difficult to negotiate with.

Information about negotiations concerning “Belaruskaliy” is quite controversial: it is unclear who, how, through what companies and for how much is ready to buy these assets.

Similar articles

Minsk attempts to make up for image losses from military exercises by opening to Western values
October 02, 2017 11:49
Image: Catholic.by

The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.

Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.

Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.

In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.

Recent trends