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 Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.