Belarus Resists Privatisation of Large Enterprises

By Andrei Liakhovich expressed on several occasions the hope that Russia would increase the volume of its subsidies to Belarus, taking into account that the West "wants to bend" him.

Defence Minister Jury Zhadobin said that Russia should help through preferential supplies of gas and crude oil, so that the Belarusian military personnel get the same salary as Russian personnel: the significance of Belarus as  Russia's western outpost increases in connection with the US' plans to deploy anti-missile defence sites in Central European member countries.

In 2012 the Putin administration will not revive the acute differences in its relations with Lukashenka's regime. However, Moscow is constantly sending signals that the respite that Lukashenka got from Russia's pressure is just a temporary one.

Any lengthy pause in Russia' foreign policy activity in regards to Ukraine will mean that Putin will get back to the Belarusian issue that he was not able to solve during his first two presidential mandates.

In Moscow they are considering what benefit they can derive from the cold war between Lukashenka's regime and the West

A number of Russian officials (in particular, Vice Prime Minister Dmitry Rogozin) said that Russia would not abandon Belarus while it is in a difficult situation and will back it. However, in reality, in Moscow they always have considered and are considering what benefit they can derive from the cold war between Lukashenka's regime and the West.

As expected, no results came out of backdoor talks about Belarus' participation in Russia's retaliatory measures against the deployment of US anti-missile defence sites. The topic of deployment of tactical missile system "Iskander" is no longer found in the statements of high-ranking Russian military officials.

To Attach Belarus Securely

The aim of Russian policy towards Belarus is to establish guarantees that regardless of who is president of Belarus, Russia's western neighbour will always take its lead from Russian foreign policy and play the role of the military and political ally. Russia strives to attach Belarus securely through a number of sequential steps of genuine integration, as it is seen by Russia.

Russian companies were interested in buying controlling shares of thirty major Belarusian enterprises

The first such step is the sale of major Belarusian enterprises to Russian companies. In May 2001 then-Prime Minister of Russia Mikhail Kasyanov said that the Russian companies were interested in buying controlling shares of thirty major Belarusian enterprises. Fifteen enterprises on the list, which was made public by Kasyanov, produced more than 50% of Belarus' GDP.

Russia has only recently bought ‘Beltransgas’. Lukashenka did not have any other choice but to sell the asset, following the launching of the ‘Nord Stream’ gas pipeline. However, Lukashenka’s team will keep resisting  Russian business interests, as far as all other positions are concerned.

No Further Privatisation of Flagship Enterprises

On March 30, 2012, Lukashenka suggested that the Belarusian side would not meet its commitment on privatisation it had to undertake, in order to get a loan from the EurAsEC Anti-Crisis Fund (i.e., Russia). “If you’d like to please the International Monetary Fund, the European Union, America, Russia or anyone else, saying that we are selling something, do it on your own. I will not support it. It will not happen, while I am in power.”

Concerning the intentions of Russian senior managers to buy controlling shares of Belarusian enterprises, Lukashenka noted: “So far, I have always suggested to the guys to leave the property alone. Just get united and show us, how you’re going to work and how you see the outcome. Then we will give you a New Year's goose, as you often say. We’ll see if you may also require a cow in your shed after that. It means 10% or 25 % respectively.”

On April 12, 2012, the Minister of Economics Mikalay Snapkou stated that Belarus would not sell large enterprises in order to meet its commitments to the Anti-Crisis Fund. It will go on selling only small and medium-sized enterprises.  “As for the ‘blue chips’ and negotiations on them, it’s a point of great nicety with economic and geopolitical pros and cons. It is not an indicator of privatisation. The indicator of privatisation is constant constructive work with medium-sized enterprises,” Snapkou said.

New Russian Loans Suspended

Talking to journalists, Snapkou talked a lot about mistakes of Russian privatisation scenario: “The aggressive, intensive, and too quick privatisation leads to a) recession; b) loss of industrial potential; c) decline in living standards. The Russian officials in turn offered their response to these statements by their Belarusian colleagues.

Russia is waiting for the privatisation of oil refineries and oil pipelines

Thus, talking about Belarus’ commitments to the EurAsES Anti-Crisis Fund on April 2, 2012, Viktor Balashov, Economic Advisor to the Embassy of Russia in Belarus noted: “Russia is waiting for the privatisation of oil refineries and oil pipelines.”

On April 23, 2012, the Minister of Finance of Russia Anton Siluanov stated that Belarus failed to meet its obligations, connected with getting a credit from the the EurAsES Anti-Crisis Fund. In particular, the country has not met its commitment to privatise state-owned assets to the sum of billion $2.5bn in 2012.

The EurAsES Anti-Crisis Fund representatives emphasised that the failure to meet the requirements for issuing the credit led to the non-provision of another transfer in the amount of $440m. This instalment was supposed to be transferred to Belarus by February 28, 2012.

Belarus Digest