Privatization: what and to whom
Privatization is the key issue in negotiations between the Government of Belarus and its creditors. The National Bank plans to attract USD 3.6 billion in 2011 through privatization.
Today negotiations are taking place regarding sales of stakes of Belarus in cell phone operator Mobile TeleSystems (MTS) (entire package, 51%), gas pipeline operator AAT Beltranshaz (part of 50% share), Minsk Automobile Plant MAZ (partially), potassium extraction and procession plant Belaruskali.
The National Bank negotiates sales of entire or part of share in commercial banks Paritetbank, Belinvestbank, Belagroprombank (also via the EBRD). However, so far the parties did not manage to agree on the price.
Stabilization loan will help Belarus to defend its negotiating position however the delay or refusal of the allocation makes its position considerably weaker.
The Belarusian government plans to auction shares in 180 Belarusian joint stock companies (either book value of shares or their market price). However the country has no positive experience in the auction sales of enterprises (previous privatization of all profitable companies was held by closed presidential decrees). There is a possibility that the World Bank will assist the Belarusian government in holding 5 transparent sale auctions of profitable enterprises.
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.