Disgrace or Promotion? Kiryl Rudy Goes to China

In July 2016, president Alexander​ Lukashenka appointed two new ambassadors – to China and to Georgia.

A few days earlier, several sources had reported that the president’s aide on economic issues – Dr. Kiryl Rudy – was to become the Belarusian ambassador in Beijing.

This information became fodder for significant speculation concerning Belarus's economic policy in the future. Many experts considered Kiryl Rudy to be a supporter of semi-liberal (or any) economic reform in Belarus. Such expectations were generally based on Kiryl Rudy’s biography, as well as his bold statements and publications regarding the current economic situation in Belarus.

Rapid career growth

At the age of 23, Kiryl Rudy completed his Ph.D. in Economics, at the age of 26 he was awarded a Fulbright Scholarship and spent four months interning in the USA, at the age of 33 he completed his post-doctoral research and at the age of 35 – in June 2013 – he became the president’s aide on economic issues.

Thanks to his earlier post as an economic counsellor at the Belarusian embassy in Beijing and as deputy General Director at Bel Huavyei Technologies (a China-Belarus joint company), Kiryl Rudy is well acquainted with the peculiarities of working in China. Moreover, some experts believe that he remains one of the main lobbyists for China’s interest in Belarus even after his appointment with the Presidential Administration. There are also rumours that he maintains business interests in China and in joint Chinese-Belarusian projects.

A new boost for relations with China?

During his appointment speech, Alexander​ Lukashenka criticised the work of previous ambassadors to China for their implementation of joint projects. Numerous researches have expressed significant doubts concerning the benefits of existing projects for the development of the Belarusian economy. The China-Belarus Industrial Park “Great Stone” is the most significant example.

In his comprehensive research, Stanislav Ivashkevich argues that Great Stone has failed to attract real manufacturing, build reliable infrastructure, or secure financing besides tied loans from China and subsidies from the Belarusian budget. Moreover, Great Stone risks becoming a competitor for the Belarusian logistics business. Kiryl Rudy has been very involved with this initiative among other examples of dubious cooperation with China.

officials do not perceive ambassadorships as particularly prestigious 

In the Belarusian public administration system, officials do not perceive ambassadorships as particularly prestigious compared with positions in the highest echelons of power, especially in the Presidential Administration. However, when it comes to appointments in major foreign partner countries, including China, the situation may be different.

For former ambassadors Anatoly Kharlap (2004-2006) and presumably Pavel Burya (2011-2016), this office signalled the end of their public administration career. However, for Vladymir Rusakevich (2000-2003) and Anatoly Tozik (2006-2010), ambassadorship in Beijing became a platform for further promotion: to the positions of Minister of Information and Deputy Prime-Minister respectively.

Kiryl Rudy belongs to the younger generation of Belarusian officials and still has ample opportunities to further his career. One can hardly call this appointment a form of disgrace or a sign of the president’s displeasure with Rudy’s statements or positions. Moreover, Alexander​ Lukashenka tends to react immediately to failures of his closest subordinates and would not have tolerated Rudy’s ‘liberal’ ideas for any amount of time without solid reasons.

Pseudo-liberalism and a throwback to the year 2011

Almost all experts believe that Rudy’s appointment in June 2013 was intended to demonstrate the president’s ability and willingness to reform the failed Belarusian model of development. Kiryl Rudy was an outspoken advocate of reducing budget allocations and achieving a more balanced monetary policy, supporting private property rights, and general liberalisation of the Belarusian economy.

the president rejects even the idea of significant reforms in Belarus

However, his appointment means that he is unlikely to be able to implement these ideas. It is also difficult to ascertain to what extent they influenced Alexander​ Lukashenka. Moreover, some experts believe that despite any economic crisis, regardless of its gravity, the president rejects even the idea of significant reforms in Belarus.

The confrontation between ‘liberals’ and ‘conservatives’ in the Belarusian public administration predates Kiryl Rudy – occurring in 2011 during the first serious economic crisis after the ten ‘rich’ years. The ‘conflict’ started between then Deputy Prime-Minister Siarhey Rumas and the president’s aide on economic issues Siarhey Tkachou.

In spite of Lukashenka’s public support of the ‘conservative’ faction, he replaced Siarhey Tkachou with Piotr Prokopovich and eventually with Kiryl Rudy. However, Rumas did not fall from grace, becoming the Head of the Belarusian Development Bank.

It seems that this ‘confrontation’ was of a largely artificial character. The Presidential Administration initiated this ‘conflict’ in order to prepare the ground for a number of unpopular measures, most importantly a reduction in social transfers. It is possible that this is the only form of 'reform' that Alexander​ Lukashenka is willing to accept.

Appeal to the IMF

However, in 2013 new negotiations with the International Monetary Fund complicated the situation. Following its Stand-By program in 2009-2010, the IMF started Post-Program Monitoring Discussions. The Fund demanded structural reforms and actual deconstruction of the Belarusian economic model. The discussions became particularly strained in 2013, when Belarus failed to complete almost all of its obligations on reforming the economy.

It seems that Rudy’s appointment as a presidential aide was meant to demonstrate the authorities’, and in particular Lukashenka’s, personal willingness to conduct at least limited economic reforms according to the IMF’s recommendations. However, during the years 2015-2016 the authorities became strongly disappointed with the IMF and in its readiness to start a new program with Belarus.

parliamentary elections will be organised in the traditional way with no opposition representatives elected

Besides vague economic perspectives, such disappointment also threatens the light liberalisation process in the country; it suggests that parliamentary elections will be organised in the traditional way with no opposition representatives elected.

China’s loans an alternative to reform?

However, the personality of Kiryl Rudy has little to do with this. He has ceased to be a source of hope for foreign agents promoting the idea of market reforms in Belarus. Meanwhile, in June 2016 China agreed to allocate a $1.4 bln loan to Belarus. In spite of the presumably very unfavourable conditions of this loan, it looks like a better option than endless and fruitless negotiations with the IMF.

At the moment, the skills and abilities of Kiryl Rudy seem more needed in China than in the Administration of the President. However, the very fact of this personnel rotation may be a signal of renewed de-liberalization of Belarusian policy.

This does not mean that Belarus will stop attempting to secure financial support from the West, including from the IMF, but changes in economic policy or in parliamentary election processes remain unlikely.

Aliaksandr Filipau

Aliaksandr is Dean of the Faculty of Extended Education at the Belarusian State University of Culture and Arts, and expert of NGO "The Liberal Club".

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