Combined Reports

On March 31 Belarusian President Alexander Lukashenko made several strong statements regarding the possible nationalization of non-governmental enterprises. According to the president, an unprofitable private enterprise can be made state's property, "We are going to check the efficiency of joint-stock companies, private corporations and other companies. If they are going to pieces and can't work properly but they are still useful for the state, they should be nationalized. And it should be done free without reproaching the government."

Under the words of the Belarusian president, "We shouldn't let anyone ruin these enterprises because their employees are Belarusian people. These enterprises should make a profit not only for their employees but also for the state. We have to clear up the situation in the private sector this year. There should be left only those private enterprises that are still profitable."

In particular, according to official sources, the government is looking into the possibility of nationalizing Motovelo Company whose 90% of shares belong to the staff of the enterprise. Lukashenko believes that the company should be nationalized without compensation. He marked that the state wasn't supposed to buy out its shares because "national shares were taken almost for free."

The named measures are much more repressive than the golden share rule that was expanded last year and gives the government authorities to interfere with the activities of private enterprises that suffer big losses. Meanwhile, independent and international experts criticize the practice of the golden share rule in Belarus.

Head of the IMF mission in Belarus Balazs Horvath noted at the press conference on March 31, "The golden share is a distinctive characteristic of the Belarusian business environment. The practice of this rule is of little use as it makes investors consider the Belarusian business environment as high-risk." The president's statement about possible nationalization is likely to scare away further investments into the Belarusian economics."

In addition, Alexander Lukashenko promised to introduce criminal liability for those business leaders who receive state's grants and fail to achieve the expected results, "It is a necessity, as we deal with financial misappropriation. They got money and showed no results."