Privatization in 2012 will be secret and non-transparent
There is neither a list of enterprises subject to privatization this year in the public domain, nor information about negotiations that are already ongoing, which implies secret and non-transparent nature of the privatization deals. All transactions will be prepared in secrecy and finalized by restricted decrees of Alexander Lukashenko.
The Belarusian authorities have added the government’s stake in mobile operator MTS to the list of companies to be put up for sale in 2012 in order to gain USD 2.5 billion by the year-end.
The sale of the governmental property worth the aforementioned amount is one of Belarus’ commitments vis-?-vis the Anti-Crisis Fund of the EurAsEC.
Neither the list of enterprises has been made public (in fact, the government acknowledges that it has not yet been completed), nor there is information about the ongoing negotiations for the sale of companies (usually such negotiations last six months to a year), which means that privatization will be of a non-transparent and secret nature. Before the end of the year the government will try to stall for time and haggle. For example, Russian investors are prepared to pay USD 500 million for the MTS, while the Belarusian authorities insist on USD 1 billion. Closer to the end of the year when time will come for Belarus to fulfill its commitments, it will start selling enterprises via presidential decrees. In any case, it is not enough to sale the MTS only. According to our estimates, Belarus will not return a USD 1 billion bridge loan to Sberbank of Russia and the Eurasian Development Bank taken at the end of 2011. Accordingly, the pledged majority of shares of Naftan will become the property of creditors. Since this would still be not enough, the country could sell the whole package of shares of Naftanand one or two companies on top of it. All transactions will be prepared in secrecy and finalized by restricted decrees of Alexander Lukashenko. Privatization in favor of domestic investors will never bring significant amounts of cash into the country as no Belarusian businessman has such funds. Domestic privatization will take place however 1) it will not be on a mass-scale, 2) strategic enterprises will be sold to the most solvent customers, that is, to Russian investors.
Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.
The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.
Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.
For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.
Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.
The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.