Privatisation has not been a happy hunting ground for nations covering the EBRD’s remit. Too often, nations have sought to placate international donors and multilaterals with pledges to sell off underperforming state assets, only to renege (often following popular outcries against the sale of major employers to foreign investors) later on.
In recent years, Turkey’s reform drive, once one of the region’s most progressive and ambitious, has stalled, undermined by (until recently) economic torpor and political instability. Kazakhstan, under current two-time premier Karim Massimov, has latterly embraced reform, in an attempt to diversify its struggling, resource heavy economy, but has as yet provided little clarity and guidance on the scale of its ambitions. Cyprus, a temporary EBRD country of operation, disappointed many by first promising, then failing, to privatise its telecoms system, a prerequisite of an earlier €10bn IMF-led bailout.
In this environment, one nation stands out, both in terms of its vocal commitment to privatisation and its willingness to follow through (albeit sometimes intermittently) with its reform agenda. In recent years, a series of Serbian premiers have voiced their intention to sell off cumbersome state assets, notably in the mining and power sectors. The country’s pro-EU premier, Aleksandar Vucic, who won a second term following general elections in April, has now promised “a new push” to sell loss-making state firms. In February, the IMF praised the country’s reform programme but said it had to be done to reduce the size of the public sector. That’s now happening. In the first week of April, Chinese industrial group Hebei Iron & Steel Group bid €46m for the loss-making Smederevo steel mill and pledged to invest $300m in expanding production, according to Serbia’s economy ministry. Hebei said it planned to boost steel production to 2.1 million tonnes, from 875,000 tonnes at present, without shedding any jobs. Other assets likely to be put up for auction this year or next include Telekom Srbija, the RTB Bor copper mining and smelting complex and the Resavica coal mine.