Privatization after Belarusian manner. Comments by Oleg Andreyev, EnterInvest



Nowadays privatization process in Belarus is almost completely frozen. This year, according to the official statistics, notreasury inflow of funds through state equities sales has been received. As reported by the World Bank, about 70% of Belarusian economy is controlled by the government sector. While 20 years ago, on September 29, 1993, when the first privatization auction took place, it seemed that private sector in Belarus, as in all civilized countries, will grow fast.  

Current situation in Belarus indisposes to conclusion of privatization deals. Even if setting aside the fact that the state is not interested in destatization of enterprises, renationalization is also possible. There is a draft law to be considered in Belarusian Parliament according to which the state will be able to appoint its representatives into the enterprises that are private at the moment but used to be state-owned. 

It is quite obvious that such chances do not encourage potential investors and currently business prefers to create infrastructure for its development autonomously rather than purchase former state enterprises.

«The highest activity is demonstrated in connection with land plots on which one can build trade and industrial objects.  Business understands that buying the existing state enterprises is fraught with consequences and can turn into a deal of trouble.   That is why investors opt for buying land plots and building there something by themselves», - tells Oleg Andreyev, Managing Director of Investment Banking Department in EnterInvest.  . 

Belarusian government has planned (in forward-looking statements) that 4 billion dollars would be received due to privatization in 2014. Still consultants do not expect privatization process, even if it would take place, to be open for all potential investors. According to analysts, under current conditions, when any privatization deal has to be approved by the state, only nomenclature privatization is possible.
«The privatization would be tailored for certain businessmen backed by current government», - considers Oleg Andreyev. 

From experts’ perspective, privatization deals for foreign investors under current conditions in Belarus are not attractive due to possible risk of conflict of interests with the state.