Privatization: official acknowledgment of defeat
2011 privatization plan failed. According to preliminary data, the authorities managed to sell shares of only 38 companies, which is 4.7 times less than the plan, for the total amount of Br 170 billion, which is 7.6 times less than the expected proceeds (the sale of Beltransgaz was not a part of the plan).
The State Property Committee of Belarus canceled auctions scheduled for 7 and 16 December, and bids announced for 8 and 21 December for the sale of state-owned shares of 13 joint stock companies. The SPC press service reported that in December the government’s stakes in the following companies will not be sold: Gomelzhelezobeton, Gomel plant of building constructions, Zhlobin repair and engineering works, Concrete products plant (Baranovichi), Plant of reinforced concrete structures (Molodechno), Lelchitsy PMC-103, Mogilevzhelezobeton, Remmeh, Rogachevstroy, Rogachevzhelezobeton, Building Trust № 21 (Borisov), Stroymash, Holding management company “Zabudova”. All these enterprises were listed for privatization in the 2011 plan, approved by the government.
Overall, in 2011, according to preliminary results, the shares of 38 public companies were sold for a total of Br 170 billion.
Therefore specialists were proved right that all privatization plans of the authorities were declarative by nature. Privatization plan for 2011 provided for the sale of shares of 180 JSCs of the common book value of Br 1.3 trillion (the plan did not include the sale of Beltransgaz). So far, according to preliminary data, the authorities managed to sell shares of only 38 companies, which is 4.7 times less than the plan, for the total amount of Br 170 billion, which is 7.6 times less than the expected proceed.
It is worth to mention that in most cases buyers of Belarusian assets were mainly Belarusian investors that in one way or another have previously collaborated with them. Therefore, in fact, it was rather a formalization of the de facto ownership that had changed long before. At the same time, new investors, foreign in particular, are not interested in privatization by Belarusian rules, based on inflated asset prices and a variety of additional burdens on investors.
Summing up the results of privatization in 2010-2011, a forecast for 2012 is that privatization patterns would be similar. Namely, there will be several large non-transparent transactions in favor of the Russian capital and a couple of dozen of sales of medium-sized public companies, mainly in the favor of local investors with core business in the private sector.
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.