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 could to step up the opposition representation in local councils, should party members demonstrate potency. The Belarusian leadership is unlikely to have the resources to ensure 100 percent pro-government candidates in the local elections. The authorities have exhausted the grassroot support and have no funds to pay for the loyalty.
The Belarusian Central Election Commission has proposed to hold the elections to the local Councils of Deputies on February 18th, 2018.
The president has repeatedly emphasised the importance of the local councils in the power system and the state machine always tried to ensure the necessary local election results. Candidates have been decreasing in number with each elections and the authorities dealt with that by reducing the deputy corps. That said, during the rule of President Lukashenka, his electoral base has changed substantially. Over the past decade, most Belarusians have moved to cities and lost their local roots. The rural population is ready to support the president, but rural residents are constantly decreasing in number.
The Belarusian leadership is likely to permit broad participation in the election campaign and an increase in alternative representatives in the local councils. However, the opposition would have to boost its activity, so as so far it has been passive in defending its interests. In addition, the authorities, while determining the date for the local elections, have taken into account the fact that the opposition is usually the least active in the winter time.
Overall, both, the opposition and the local authorities have exhausted their grassroot support, however new local leaders may still come on political stage, although the party opposition has not yet shown sufficient aspirations.