Belarus facing default :: Charter'97 :: News

Belarus suddenly appeared in the center of attention. Government sources continue announcing high industrial performance, economic growth, disapproving predictions of economic growth. However, foreign experts stress such acute problems as limited foreign currency resources and deficit of foreign currency for international payments, the Nezavisimaya Gazeta writes.

Thus according to the Global Insight assessment made in early August, the Belarusian economy is facing default and such authorized organizations as Standard &Poor’s and Moody’s warn about the necessity of extended economic restructuring.

Thus, in August the Minsk Motorbike and Bicycle Works was privatized at USD 7.2 million price which is actually lower than its real cost and 51 % stock of the top mobile operator Velcom. Certain foreign investors who think that their time has come should not be in a hurry as they are not demanded here in the country.

Certainly, preconditions for privatization are noticeable but it is the government that decided what to sell and whom to sell. Despite of Lukashenka actions on the government staff reshuffling quite influential political figures occupying top positions in the state and governmental bodies have appeared on the political arena. Thus formation of administrative business groupings around such persons as Prime Minister Syargei Sydorsky, secretary of state Security Council Viktar Sheiman, former chairman of the house of representatives Uladzimir Kanapliou and internal minister Uladzimir Navumau has be come noticeable of late

Those groupings compete for controlling over the assets of state enterprises and this competition from time to time becomes disclosed to the public in the form of top retirements. The relations between top officials are rather controversial thus hampering them to unanimously confront Lukashenka. None of the groupings is strong enough to confront simultaneously both Lukashenka and its competitors. As far as Lukashenka is concerned he is not in position to do away with all of them at once. Thus the situation beneficial for the officials to start legalizing their properties and cash flows under the pretext of privatization and limited reforms has been established at the crises background.

And, certainly, the state officials performing a sort of state property privatization among themselves and their next- of- kin do not wish any foreign competitors. That may supposedly explain a recent self- canceling of Belarusian breweries offers made to Hеineken, SAB Miller и BBH companies. Privatization of highly profitable building companies is expected in the near future. They will become the property of their present governmental managers without any outside competition.
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Transferring of state property to officials or their substitutes does not mean true market reforms in Belarus. As Lukashenka regularly declared dwelling on privatization issues the enterprises will be transferred into”good hands”. And it so happens that according to the top state officials it is their hands that are the “best “.Foreign investors are asked not to get bothered.