Privatization: official acknowledgment of defeat

Category status:
April 22, 2016 18:01

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.

Similar articles

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

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