Privatization: a strategic fight for terms and conditions
Head of the State Property Committee of Belarus Georgy Kuznetsov announced at a press-conference that Belarus will sell to Gazprom the remaining 50% of the stake in JSC “Beltransgaz” for USD 2.5 billion before the end of 2011.
According to Kuznetsov, Belarus has imposed a lot of additional conditions regarding prices, tariffs and other issues that hampered negotiations. However in the autumn the parties will agree on all terms and the transaction will be completed.
Russian JSC “MTS” offers to pay USD 400-500 million for the state-owned shares of the Belarusian subsidiary, said Kuznetsov, noting that Belarus would like to receive USD 1 billion for the asset. According to the State Property Committee, it has been tasked to assess Belarusian assets’ maximum value in order to negotiate it in the future to reach the acceptable compromise.
It is likely that Belarus will have to cede to “Gazprom” on the issue of privatization of “Beltransgaz”, creating a precedent that would anticipate further concessions to Russian investors in the course of imminent privatization.
Belarus has to sell “Beltransgaz”, it is the only asset that has been prepared for the privatization, and is able to enrich the gold and currency reserves with USD 2.5 billion.
Russia understands this. It proposed to postpone talks until September. On 19 July in an interview with BelaPAN Russian Ambassador to Belarus Alexander Surikov said, Russia was considering the purchase of “Beltransgaz” “largely as a remedy for Belarus because of the rising gas prices that took place during the transition to mutually beneficial market relations”.
Russia was considering the purchase of “Beltransgaz” “largely as a remedy for Belarus because of the rising gas prices that took place during the transition to mutually beneficial market relations”.
The majority of Russian investors are not satisfied with the prices for Belarusian assets. They believe the market assessment made by Belarus is overly exaggerated and it is impossible to reach an acceptable compromise. Consequently, Russia will work to change this approach, while supporting the Belarusian economy at the cost of sale of the “Beltransgaz”
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.