We have written about how exporters across the globe are suffering due to reduced energy prices and China’s economic slowdown. As commodity exporters grapple with low prices and slowing demand, many major energy exporters are beginning to resort to privatizations in order to mitigate some of the exporting countries’ vast revenue losses. Nigeria, Saudi Arabia, Colombia, Russia, Kazakhstan, Azerbaijan and Turkmenistan are all commodity exporters now either implementing or embarking upon ambitious privatization plans. While each country is in a different stage of this process, for these exporters, privatizing assets in the current economic climate means both selling stakes in key companies at low prices and foregoing some control over assets that have long underpinned regime power. Loosening control of key state assets can, to varying degrees, destabilize regimes. Privatization plans will thus face resistance as concerns emerge over both pricing and loss of control over significant assets.

Countries that depend heavily on commodity exports for government revenue have been forced to repeatedly cut expenditures over the past months, with some countries reducing public salaries and subsidies. However, budget cuts have thus far been unable to completely mitigate the loss of revenue. At the same time, governments are fearing social unrest, as discontent grows over deteriorating economic conditions. While commodity prices were high, large state-owned companies and other assets were a boon for regimes because they brought in vast revenue while allowing regimes a high degree of control over key sectors of the economy, as well as a useful tool for maintaining patronage networks. Faced with economic crises and potential unrest, however, governments are growing desperate for extra funds, and thus are considering significant privatizations.

In Russia, one of the exporters hardest hit by falling world oil prices, the government is considering the sale of a 19.5 percent stake in oil giant Rosneft, as well as the privatization of two banks, Sberbank and VTB. In fact, last month, Finance Minister Anton Siluanov said that Russia’s goal is to raise 1 trillion rubles ($13.53 billion) from privatizations this year. Neighboring Kazakhstan is also working to implement a privatization plan, with stakes in firms such as oil and gas company KazMunaiGas and nuclear holding company Kazatomprom reportedly up for sale. Throughout the region, countries that over the past decades built independent foreign policies due to their strong hold over vast energy resources are also embarking upon privatizations: President of Azerbaijan Ilham Aliyev has given order for an extended privatization campaign, while Turkmenistan is selling state assets.

But these privatizations are not solely taking place in the former Soviet Union states. Saudi Arabia shocked observers with the announcement of a potential initial public offering for Saudi Aramco, while Nigeria is planning an IPO for its national oil company by 2018.

One risk these governments take when preparing for privatizations in order to plug holes in their budgets is that they are selling strategic assets at a time when their sale value is much lower than just a few years ago. When Colombia’s government sold its stake in power generator Isagen to a Canadian holding company, the government came under much criticism because there was only one bidder and the price was ultimately the minimum set by the government. This is far from an ideal time to sell state assets, but low commodity prices and weaker demand are leading governments to settle for low buying offers.

The second risk for exporting countries’ governments when selling state assets is that they lose control over companies that have allowed them to exercise a large degree of economic and political control. Companies such as Rosneft in Russia or KazMunaiGas in Kazakhstan are not merely valuable for regimes due to their tax contributions: they are valuable because they allow the regimes to use vast resources to achieve political and economic goals, as well as distribute resources to loyal elites. In Saudi Arabia, full control of Aramco is one of the pillars of the regime’s foreign policy, as control of oil reserves has allowed the regime to develop leverage in its dealings with foreign powers.

It remains unclear, however, whether many of these planned privatizations will be implemented. There are political constraints, as many elites will resent losing control over valuable assets. There are also financial realities: in some cases, international investors will shy away from spending money in the commodities sector when prices are so low, and as some commodity exporting countries are becoming increasingly unstable. Nevertheless, as countries pursue privatization plans, the fundamental weaknesses of exporters are becoming more and more apparent.