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June 27 – July 3, 2011

Privatization in favour of foreign investors: still no transactions

The situation has not changed
Privatization in favour of foreign investors: still no transactions

State-owned shares of MTS [Mobile TeleSystems] are planned to auction this year (51%), announced the Head of the Accounting and Disposal of Shares Department of the State Property Fund of the SPC Anna Kornievich.

“Gazprom agrees to pay $ 2.5 billion for 50% of Beltransgaz, the contract could be signed “tomorrow” if Belarus does not raise additional conditions”, said the Head of the Russian gas holding Alexei Miller.

Comment

There is an obvious mismatch in the negotiating positions. Belarus is trying to influence investors by applying brute force however it is unlikely that such tactics will be successful.

At the same time, the lack of significant revenues from privatization is not in the interests of the authorities as they 1) must show to the existing and potential donors and creditors that privatization is ongoing in the country, 2) need to attract FDIs to implement a plan and 3) thereby have to close the trade deficit.

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Once a week, in coordination with a group of prominent Belarusian analysts, we provide analytical commentaries on the most topical and relevant issues, including the behind-the-scenes processes occurring in Belarus. These commentaries are available in Belarusian, Russian, and English.
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