But before the decision was made, Economics Minister Vladimirs
Makarovs threatened to resign if the share price was kept too low and
the bidding process too murky. A government crisis was averted after
Makarovs and Prime Minister Andris Skele met, but the dispute
suggests the specter of government collapse still lingers.
TBT talked with Mr. Makarovs last week about the shipping company
decision and the future of the government. What follows are excerpts
from that interview:
- Are you content with the LPA's ruling on the shipping company: the
share price, the deadline for bids, the overall timeline for
privatization?
Privatization of big companies, such as the shipping company, is a
long-term process. We discussed the starting price, and we decided on
the median price within the [audit range] established by
PricewaterhouseCoopers, from 44 santims [$0.76] to 59 santims. And if
the council of the privatization agency reports that approximately 20
companies around the world are interested, from which six are
interested very deeply, it means this median price is a normal
starting price.
- But was it wise to delay the deadline for investors to make their bids?
To my mind, if we really want to invite companies from the United
States, Canada, Japan, around the world, then they need some time to
take a decision to participate and secondly, to collect the necessary
money. This is the question: how long does a big a company need for
decision taking? They can take quick action once they've decided, but
they need a long period to make their decision. To my mind, that's
normal, especially if we think about 20 to 26 companies that have
been interested in the privatization process of the Latvian Shipping
Company.
- Are there that many companies? Is there really such significant interest?
(Laughs). That is the opinion of the Latvian Privatization Agency and
the chief of this agency. This is what he told the government and the
privatization council, that approximately 20 companies have been
invited. We want as many participants as possible, but this campaign
must be very open. It's in the interest of the government.
- The prime minister said after the decision that the delay, for the
time being, is going to cost the privatization fund 40 million lats
in revenue.
Yes, but for the minister of economics, it's a long-term question:
How are we to use the money made from privatization? Is it money for
daily needs, or is it money for stability funds, or is it money for
reconstruction of the country's economy? And if we receive the money
on Dec. 25 or 26, what will happen? We will use it to buy New Year's
presents?
- The prime minister was angry that you spoke of rumors about
corruption within the privatization agency. Is there corruption?
It's only a feeling, but when I see that somebody wants a short
negotiating period and a very low price, I have to ask, "Why? What's
the reason?" It is impossible to speak about budget needs and demand
the price should stay so very low.
But I believe this government is taking some steps against corruption
in Latvia. There are audits done in every ministry. There are changes
in the law against corruption. I think that really, the possibilities
for corruption are becoming smaller and smaller.
The second point, the LPA must better realize that it must have a
public relations campaign and explain to society its activities. If
society doesn't understand something, society will start speaking
about corruption.
The best methods against corruption are clear rules, good public
relations and publicity.
- Is this government stable? Will it be able to weather future disagreements?
It depends on the prime minister, and his possibilities to organize a
dialogue among the coalition parties, a dialogue with society. He has
to explain to society and the coalition partners why we take this or
that decision. Do the other parties feel like participants in this
process, or just an army for the realization of one or another
project? For me, personally, I can handle the style of the prime
minister, but it's very hard to explain it to society sometimes. Look
at the changes in the pension rule, at higher education reform.
To my mind, it is not the best way to simply talk of an idea, look at
society, and go back and pass it. The best way is to start a
discussion, present your arguments, listen to the arguments of the
other side, then take a decision.
But I think this three-party coalition is the best possible model. I
speak about the parties, not so much about individuals. It's fully
possible that I may not be the right person to sit here. To my mind,
policy depends on the parties more than the person. We need a leader
who can take a decision and implement it. But we don't need a
dictator.
- You had floated the possibility of resigning last week? Is that still
a possibility?
(Silence) Who knows?
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