Towards the signing of the Treaty with Belarus

Russian capital has nothing to do in Belarus
Because there is no privatization
Yesterday the Union of Russia and Belarus became a reality (for more details, see page 1). Is it possible to talk about the impending easy takeover of Belarus by Russian capital (which now ceases to be foreign there)? Hardly. The Minsk authorities continue to think that the value of Belarusian enterprises is too great for them to be taken and sold. There is practically no privatization in Belarus - and with the creation of the Union the situation most likely will not change.

Belarusian President Alexander Lukashenko has repeatedly said that he will not follow the Russian path of “massive privatization.” And he didn’t: privatization in the republic proceeded very sluggishly and last year almost stopped.
There are no large privatized enterprises in Belarus. The only exception is the Gomel plant "Coral", specializing in the production of television picture tubes, the controlling stake of which was bought by the American company Westray Group. But this exception only confirms the rule.
There are, however, plans to privatize another large enterprise - the Novopolotsk oil refinery. (Russian oil companies are going to participate in this.) However, not everything has been decided here yet.
Minsk’s reluctance to part with state property was perhaps the main reason that Belarus’ relations with international financial organizations have become very cool. During 1996, the republic did not receive a single dollar from either the IMF or the World Bank.
At the end of October, at the annual session of the IMF and the World Bank, the Belarusian government held negotiations with representatives of these organizations on privatization. As a result, the World Bank agreed not to demand much - but let there be at least some privatization. As a result, during the period from November 1996 to the end of January 1997, according to Deputy Prime Minister Pyotr Prokopovich, about 130 objects were privatized. But this, however, is a purely symbolic gesture, since all these objects are small enterprises that do not have any impact on the general state of the industry.
By the end of December last year, the Belarusian government planned to approve the privatization program, but literally before the New Year the document was sent for revision. The official reason given was the need to clarify the list of enterprises subject to privatization and solve the problem of paying off debts when changing the form of ownership. But, undoubtedly, the real reason is that the authorities have not decided whether they should part with state property.
With the privatization of trade, food, and consumer services enterprises, things seemed to be going somewhat better than with the sale of industrial enterprises. About one and a half thousand of these “small privatization” objects have already been sold. Previously, it was even assumed that by 1997 all municipal property, shops and restaurants would be privatized. However, even here the prospects are very vague: judging by the latest statements of Alexander Lukashenko, he does not intend to rush into “small privatization.”
Moreover, the few privatized enterprises have a lot of problems. World Bank experts have repeatedly noted that with the existing tax system in Belarus, privatized enterprises cannot operate normally - suffice it to say that the tax inspectorates of Belarus still have the right to seize company property out of court.
In general, it is unlikely that it will be so easy for Russian capital to acquire Belarusian property. It’s one thing to use financial power to buy enterprises from Belarusian private owners at a real, or even better, reduced price; It’s quite another to play a game with the Belarusian authorities, who are too afraid to sell things short. Even if we assume that there are enough potentially profitable investments in Belarus (which is actually debatable), it will be difficult, if not impossible, to buy them profitably.
Of course, one could hope for a change in Lukashenko’s privatization policy—for example, under pressure from the Russian authorities. But so far nothing confirms such predictions. Not so long ago, speaking before a parliamentary meeting, Alexander Lukashenko said that Russia should use the Belarusian experience of privatization (or rather, the lack thereof), but not the other way around.

ANNA Kommersant-Baneva,
VIKTOR Kommersant-Melnikov

Newspaper "Kommersant" No. 44 dated 04/03/1997, p. 5