Analyst: Russian privatization scenario is advantageous for Belarus

Financial analyst Vadzіm Іosub explains why it is advantageous for Russia to overpay for Belarusian enterprises and who wins the privatisation battle.

Euroradio: In the context of the authorities’ cancellation of privatisation lists, we would like to ask - will there be privatisation or not?

Vadzіm Іosub: The decision itself does not answer the question as the decision may have two outcomes. On the one side, there will be no list of enterprises that will be privatized and on the other hand – there will be no list of strategic enterprises that will never be privatized. Theoretically, the list may be expanded but the state does not bind itself to privatizing this or that enterprise.

Euroradio: How will it be realised? Will the number of enterprises increase or decrease?

Vadzіm Іosub: We should start with the fact that the Belarusian authorities have always disliked privatisation and were forced to agree to it when they really needed money (as it was with Beltransgaz) or when creditors started demanding it. It is difficult to predict how it will influence the number of privatised enterprises. There must be some obligations connected with the EurAsEC credit. We were supposed to sell enterprises for the sum of 2.5 billion dollars and to make a list of them to receive another tranche of 440 million dollars. We know that the list has not been presented yet and the decision about the allocation of the tranche has been being postponed since the end of February. There may be a special list of the EurAsEC or the EurAsEC may make concessions. There is still some intrigue in this issue.

Euroradio: It looks strange as Belarus has suddenly abandoned its EurAsEC obligations...

Vadzіm Іosub: This is not the first time we have witnessed this flexible attitude to obligations. There is an economic explanation too. Belarus was in need of money when the agreement was signed. However, the economy is not in such a bad state now: the trade balance is positive and money is not such a big issue now. Maybe the authorities have decided that we do not need another tranche and are playing this game. If you look at the project of privatisation of the sparkling wine plant, you may notice that the authorities are interested in privatisation. However, the privatisation affects medium enterprises, not the biggest ones and the sum is smaller than 2.5 billion dollars a year.