Lukashenko: Any enterprise can be privatized in Belarus, the only question is price

On Friday, Lukashenko held a meeting on privatization. According to him, “Any company can be privatized. Any, without exception.” He stressed that there would not be a wholesale privatization of the country. “If it is necessary to the state, it will have the targeted nature”, said Lukashenko.

Comment

Loans taken out by Belarus, and the inability to attract cheap credit resources (recently Belarusbank has attracted a syndicated loan of USD 130 million for the year at 9% per annum) for the necessary modernization and promoting economic growth and exports, have forced the government to raise the issue of privatization. Privatization, in one way or another, is on the agenda of the requirements of the AF EEC and negotiations with the IMF, as well as increased cooperation with the World Bank, EBRD, etc. All this is forcing the government to raise the issues of privatization, causing hysteria with Lukashenko.

Questions of maintaining power for Lukashenko are inextricably linked to issues of control over Belarus’ main assets, to preserve a dominant role in the economy. Hence the angry and abusive (he estimated the welfare of his ministers, “a thousand bricks”) attacks against the privatization of lobbying the government and the governors: “If you want to please the International Monetary Fund, the European Union, America, Russia or someone else, saying that we will sell something, then it’s not with me and not under me.”

Once again, he has publicly confirmed the thesis that privatization should be solved only with him. And it is only after his approval that any company may be privatized, no matter whether it is a joint-stock company, has all the necessary documents, etc. The key issue to Lukashenko is the question of price. However, this is such a position which makes all the Belarusian assets cheaper in the long run. First, privatization, even pointed, will be of an emergency nature, because otherwise it is impossible to pay off debts. Second, with the current image of the country, Belarusian enterprises will only interest Russian investors, who can wait, apply pressure and reduce prices. Third, the economic crisis continues in the world together with the reduction of budget deficits, forcing many governments to privatize the assets, previously considered to be strategic. The crisis among the elite and in Lukashenko’s entourage has led to the expansion of the government, which weakens the positions of both sides.