Leanid Zlotnikau: IMF loans impede democratic reforms
- 8.07.2009, 9:55
Independent experts say the Belarusian authorities won’t privatize state-owned enterprises.
On demand of the International Monetary Fund controlling stakes of the biggest state-owned Belarusian enterprises may be put up for sale in February 2010. Euramost.org asked famous economist Leanid Zlotnikau to comment on possible consequences of this unprecedented in the national economy event.
– There’s no information about the concrete big enterprises that may be privatized. In your view, what companies may these be?
– About 160 industrial, building, and transport enterprises were turned into joint-stock companies. In total, about 600 Belarusian enterprises were turned into joint-stock companies. It means that they can be privatized. Among them are such big enterprises as Naftan, Polimir, MAZ, the metallurgic plant in Zhlobin, etc. There are enough enterprises, among them big one, that can be privatized.
– The authorities have said earlier they don’t want to privatize big enterprises for fear the Russians, Germans and other foreign oligarchs could buy them. Do foreign citizens have a chance to posses Belarusian enterprises as a result of this privatization initiated by the IMF?
– The government planned last year that about 100 newly established joint-stock companies would be privatized. However, almost nothing was privatized. According to Lukashenka, one of the main reasons was that companies are cheap during the crisis. There’s no sense in selling them at low prices. But I don’t think it was the main reason. The major reason is that there won’t be privatization while there are some money and possibility to get loans. The IMF gave the second tranche of the stabilization loan. It meant that the country can live on for some time without liberalizing the economy and privatizing enterprises.
What to the IMF’s demands on privatization of some companies... As a rule, other countries don’t fulfil such demands. Belarus won’t be the first. IMF usually grants loans to the countries in difficult financial situation, they help the governments not to carry out reforms. Formally, they are supposed to push the countries to liberal reforms, transferring from the state type of ownership to the private one, but quite the reverse, IMF loan save the countries from such privatization. These loans are given if privatization and liberalization are promised. As a rule, it’s easy to give such promises. Or such slight moves as increasing the limit of mark-ups of bananas by 5% or establishing free prices on services of laundries and beauty salons. This has been done at ours. These were new promises to get new loans.
– What should be done with the schedule of privatization, outlined till the end of February 2010? Is it possible not to fulfil it?
– The state programme of privatization of more than 100 enterprises was adopted in July 2008. Was it performed? No, it wasn’t. Any privatization programmes won’t be fulfilled until there’s a desperate situation in the economy. A new law on privatization may be adopted on IMF’s demand. But it doesn’t mean privatization will be carried out. Nothing wil changes wile we have what to drink and eat.
– Don’t IMF experts understand this?
– They do. But they saved Russia from liberalization in the 1990s and Nigeria from liberal reforms. They performed their task on financial stabilization of the country, the rest is only a semblance. The IMF doesn’t play a role in economic reforms.
– Is it early for foreign tycoons to pull out purses to buy industrial enterprises in Belarus?
– They don’t hurry to pull them out to privatize the Minsk Tractor Plant (MTZ) or the Minsk Automobile Plant (MAZ). MTZ and MAZ today can useful only for their areas possible for constructing new buildings. They are not the enterprises one would like to buy. For example, Russian investors want to have the enterprises “close to the pipeline” that use oil and gas as fuel. And chemical enterprises. They may be interested in high technology companies or those dealing with trading network, housing, or business centres construction, and so on. But MAZ and MTZ... If the government want to sell them, the price will be very low.