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Lukashenka: Enough Babbling about Privatization

Russian Deputy Prime Minister Arkadiy Dvorkovich visited Minsk on an official visit in February. A number of experts believe that in the near future, Lukashenka's regime will make important concessions to Russia and sell major enterprises to Russian companies...


Russian Deputy Prime Minister Arkadiy Dvorkovich visited Minsk on an official visit in February. A number of experts believe that in the near future, Lukashenka's regime will make important concessions to Russia and sell major enterprises to Russian companies in exchange of favourable terms of supply of crude oil from Russia.

According to them, Dvorkovich came to Minsk as a representative of a wholesale buyer of Belarusian enterprises. Together with First Deputy Prime Minister Vladimir Siamashka, Dvorkovich visited some major Belarusian enterprises: Minsk Automobile Plant, "Hrodna Azot" and Agricultural machinery plant "Homsielmash".

As the Russian Deputy Prime Minister said, the parties agreed that before the end of the month Russian companies would conduct negotiations with top managers of MAZ and "Hrodna-Azot" and agree on joint steps for developing cooperation.

Privatisation linked to Russian oil supplies?

During a joint interview, Siamashka said that the parties continued negotiations about supply of crude oil in 2013. According to him, even while the agreement has only been reached for the first quarter, Belarus expected receiving 23 million tons of crude till the end of the year. He pointed out that Russia proceeded from this figure as in the first quarter it would supply a quarter of the volume requested by the Belarusian side – 5.75 million tons.

The opinion that the Russian Deputy Prime Minister came to accept the surrender of Lukashenka is not justified. Options for cooperation which the Belarusian side is suggesting to its Russian counterparts do not envisage privatisation of major enterprises.

On the eve of his visit to Minsk, Dvorkovich said that Belarus should compensate losses of the Russian budget from the "solvents and diluents" business which is estimated in at least USD 1.5 billion in Moscow. He also stressed inadmissibility of nonfulfillment by the Belarusian side of its obligations to supply high-octane gasoline to Russia. However, he did not raise these acute questions of bilateral relations during the talks.

Siamashka, speaking about prospects of receiving crude oil from Russia, said once again that Belarus was fulfilling in full its obligations regarding supply of oil products to Russia.

What is on sale?

On February 26, speaking at a meeting of the Council for Business Development at the President, Lukashenka made statements which implied that Siamashka, by far, was not the only "Mr. No" in power in the matter of sale of enterprises to Russian companies.

In contrast to Russian companies, the Western business does not lay claims on purchase of major Belarusian enterprises. Clearly speaking of Russian partners, Lukashenka said:

We won't privatise anything in the lump. We even gave up on having a list of enterprises singled out for privatisation. Any enterprise can be privatised: "Belaruskali", which many put their eyes on, oil refineries, MAZ, BelAZ and others. However, these enterprises have very high price. For instance, the announced price of "Belaruskali" is 32 billion dollars, I can't reduce it. They don't want to buy at this price – fine. We aren't in a hurry. These are efficient companies.

Lukashenka's team understands well that sale of major enterprises would mean strong attachment to Russia and dependence from Moscow, including in political matters. He said: "If they babble about privatisation in the government, and it passes to society… Then, there is a question: so, do you want to sell out the country ASAP?"

Lukashenka said repeatedly that he would not allow, as he puts it, a "barbarian privatisation" which can be imported from Russia. However, among major Belarusian businessmen who are loyal to him, Lukashenka speaks about his vision of privatisation.

The group of personalities similar to Moshenski and Shakutin understands very well that Lukashenko's words that "there would be no privatisation among officials or selling enterprises cheaply to big businesses" are a pure and simple populism.

For Lukashenka, former chairman of a kolkhoz and political propaganda worker during the Soviet era, it was impossible not to tell words pleasing to the Belarusian television audience to common people sitting in front of TV screens.

Among the members of the Council, there are also people who manage the business of Lukashenko's family: Jury Chizh, director of "Triple" (export of oil products, manufacturing of building materials, construction, network of hypermarkets, network of restaurants and cafes) and Evhieni Shihalov, director of the trade house "Zhdanovichy".

The following words of Lukashenka may be seen as addressed specifically to those present: "Please come. All things being equal, we will give preference to our people. But it should be in honesty. This is why the national investor will exist. If somebody lacks money alone, so get together".

Conditions attached to privatisation

Lukashenka also provided criteria of who are "our people" and who are not.

First, private business must not finance opposition. He said: "If a businessman finances the "fifth column" or makes negative impact on society in some other way, I will see it as their involvement in political struggle, in struggle against the state. And this struggle has its own laws. Then, let such businessmen take no offence".

Second, the entrepreneurs must finance social programmes. It follows from Lukashenka's statements that businessmen must by sympathetic towards "suggestions" of the authorities to finance repair of streets, roads and buildings and give money to kolkhozes for sawing campaigns.

These words of Lukashenko are not addressed in the first place to his confidant businessmen. Shakutin, Moshenski or Chizh can hardly be suspected of intentions to finance opposition. This is a warning to entrepreneurs who, at best, will get crumbs from the pie of possible privatisation.

One can get very big troubles (up to closing down of business) for hiring an opposition activist, for giving a pack of paper to a regional branch of an opposition political party, for any assistance to an NGO, which is seen as the "fifth column" by the authorities.

Not only pro-European organisations belong to the “fifth column”, according to Lukashenka. At the beginning of May, 2010 he claimed that Russia was financing several opposition organisations. After that the offices of the “Tell the Truth” campaign were searched in 20 cities of Belarus on May 18.

Overall, Lukashenka's team gets additional reasons to believe that during this year Russia will not bring into focus the acute questions of bilateral relations. The suggestions to sell enterprises to Russian companies will be a probing of the Belarusian side's position and will not be accompanied by pressure.

Andrei Liakhovich

Andrei Liakhovich is a contributing author. He directs the Center for Political Education in Minsk.

Andrei Liakhovich
Andrei Liakhovich
Andrei Liakhovich directs the Center of Political Education in Minsk.
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