Belarus targets $1 bln in privatisation this year

By Jonathan Lynn

GENEVA, April 28 (Reuters) - Belarus hopes to raise about $1 billion in privatisation proceeds this year, a similar amount to 2009, as it pursues economic reforms, a senior government minister said on Wednesday.

Andrei Kobyakov, the deputy prime minister in charge of the economy, said however that the aim of privatisation was not primarily to raise funds for the state.

"We regard privatisation as a means of making our public assets more efficient," he said, speaking through an interpreter.

The former Soviet republic, lying between Poland and Russia, has embarked on a series of economic reforms that have seen it climb from near the bottom to 58th out of 183 in the World Bank's rankings on ease of doing business.

With a budget deficit projected to reach about $900 million this year, money from privatisation will come in handy, but the real goal was to attract investment to Belarussian enterprises to modernise them, Kobyakov told a briefing.

One example was last December's sale of Belarus's BPS bank to Russia's biggest lender, state-controlled Sberbank (SBER03.MM: Quote, Profile, Research). Russia is by far the biggest investor in Belarus, accounting for nearly two-thirds of investment.

Kobyakov was speaking after a two-day investment conference organised by the United Nations Conference on Trade and Development (UNCTAD), at which Belarussian officials met more than 60 current and potential investors.


Foreign direct investment in Belarus doubled to $4.8 billion in 2009 from $2.3 billion in 2008 and up from $1.3 billion in 2007. Kobyakov said the main sectors attracting investment last year were commerce, trade, telecoms, industry and wood processing.

Belarus is also planning to raise at least $500 million from a maiden Eurobond this year, and said on April 9 it could be launched in May. [ID:nLDE6380G3]

Kobyakov said Belarus would be asking the European Union to return Belarus to the EU's General System of Preferences, giving its goods favoured access to the European market, now that it had followed International Labour Organisation (ILO) recommendations to improve workers' rights.

The EU removed Belarus from the system, which helps developing and transition economies, in June 2007 after the ILO listed it as a country violating trade union rights.

The ILO has now dropped Belarus from the list as a result of measures taken by the government.

But the International Trade Union Confederation said Belarus continued to engage in "widespread and significant violations of workers' rights" and UNCTAD urged it do more to develop union rights given western investors' sensitivity to the issue.

Kobyakov, who was due to meet World Trade Organization officials later on Wednesday, said that he was not aware of any formal decision by Russia, Kazakhstan and Belarus to drop their joint bid to join the WTO, and Belarus would continue its accession bid on that basis.

Russia's first deputy prime minister, Igor Shuvalov, said on Monday that Russia would pursue a lone bid rather than applying jointly with its two neighbours, with which it is forming a customs union. [ID:nN26503194]

(Editing by Mark Trevelyan)


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