The European Humanities University Responds
The European Humanities University (EHU) certainly welcomes the attention of the Belarus Digest team (including the Centre for Transition Studies) and any and all constructive discussions about EHU’s ongoing mission.
Regrettably, the recent Belarus Digest article EHU: How Belarusian is the Belarusian University in Exile? rehashes a number of myths and stereotypes that persist despite clear evidence to the contrary. It’s also unfortunate that the author declined our invitation to visit EHU campus while in Vilnius. We think it would have helped her to better assess how Belarusian EHU really is.
Even more disappointing “EHU: Optimising Impact on Belarus”—a paper by Belarus Digest Editor-in-Chief Yaraslau Krivoi and Alastair Rabagliati that promises to “look at the impact of the European Humanities University (EHU)…on Belarus-related studies, teaching and public discourse”. Instead, the authors deliver a superficial analysis that disregards information provided to them upon request on a range of issues (e.g., research, recruitment, labour contracts, communications, and others). This results in recommendations many of which are either already in progress or miss the mark in terms of the university’s character and mission. Even worse, the paper creates the erroneous impression that EHU does not consider educating Belarusian students its top priority (it does), that the university somehow lacks proper oversight (it has an international Governing Board and an independent Trust Fund administered by the Nordic Council of Ministers), and that Belarus-focused research and teaching is not the rule but the exception (more on this below).
Perhaps it’s best to begin with the general claim by the author of the first article that EHU “is struggling to find its identity” and is “torn apart between being the Belarusian university in exile and a ‘normal’ European university based in Lithuania”. There is absolutely no question at EHU that our university exists for the sake of Belarus and Belarusians. It is by no means a “normal” Lithuanian university and it never will be. It is Belarusian, belongs in Belarus, and only operates in exile because it refused to put up with violations of its academic freedom. These included the Belarusian government’s demand to allow it to determine who may or may not lead EHU.
EHU is always striving to improve its offerings to students. Naturally, this entails regular reviews and evaluation of faculty and department performance as well as the changes necessary for improvement. Change is never easy, and not everyone is happy about every change. But the changes at EHU have nothing to do with any intent to “shift focus from Belarus towards becoming an ordinary Lithuanian university” (to quote the article). The notion that EHU is “torn apart” by a “struggle to find its identity” is hyperbole.
The claim that EHU has “started to replace dismissed Belarusians with Lithuanian academics” is unsubstantiated. There are, in fact, no such cases. Some fact-checking of a claim like this by the author (or the editors) would have been appropriate. In reality, over 90% of EHU’s full-time faculty is Belarusian, as is the majority of non-academic staff. Of the more than 200 faculty, only 12 are Lithuanians. There is only one department that is led by a non-Belarusian: the newly-created department of social and political science. All others are led by Belarusians. That said, it has never been the policy of EHU to employ only Belarusian nationals. Faculty and staff are chosen for the contributions each of them makes to an enriching experience for students.
As for EHU’s recruitment priorities, currently 95% of EHU students are Belarusian. Belarus is and will remain the focus of EHU’s recruitment efforts. At the same time, EHU’s leadership has decided that students and the university would benefit from a somewhat more diverse student body. So a decision has been made to increase recruitment of non-Belarusian students, with an upper limit set at 20%. Since non-Belarusian students would not be eligible for the financial support provided by most current donors, they would be full-fee-paying students who would help the university sustain itself financially, particularly when the number of high school graduates is falling dramatically throughout the region (due to the drop in birth rates following the fall of the Soviet Union). Non-Belarusian EHU students are subject to the same academic requirements as Belarusians. Attending EHU is an opportunity for all of our students to learn about Belarus and meet Belarusians while receiving a European education.
Being an international and a European university while maintaining a focus on Belarus are not mutually exclusive goals, and EHU has always done both. When it was in Minsk, EHU cultivated copious international connections and provided an education to Belarusians that was truly international in scope. This, in fact, was one of the reasons the university fell into the regime’s disfavor. At the same time, a Belarusian spirit permeates EHU. Programs are taught in a way that closely relates theory and general knowledge to the Belarusian experience. So it should be no surprise that:
- More than half of all student theses are Belarus-focused
- More than one-third of EHU’s scholarly events either focus on Belarus or take place in Belarus
- More than one-third of EHU courses focus on Belarus
- 44% of EHU publications are published in Belarus (16% in the Belarusian language), and academic journals like EHU’s Belarusian Historical Review focus primarily on Belarus
- EHU regularly hosts and participates in Belarus-related cultural events, including Belarus Freedom Day celebrations, concerts, workshops, excursions, and the like
- Students, alumni, and faculty participate in Belarus-focused events, including photo exhibitions, guest lectures in Belarus, competitions, and others
- EHU’s student newspaper, the EHU Times, is published entirely in Belarusian
- EHU’s new core curriculum includes a course called the History of Belarus in the Context of European Civilization that is required for all students entering undergraduate programs (starting this year)
Thus, the observation that ”it appears that [students] cannot learn much about Belarus at EHU” because “only one specialisation appears to have the word ‘Belarus’ in its title” is superficial, to say the least. And the idea that students at universities in Belarus can study such subjects as international law in the same way they learn it at EHU (with our strong focus on human rights and their ongoing abuse in Belarus) simply beggars belief.
As for the observations about EHU’s Founding Rector Anatoli Mikhailov, he is currently serving his second and final five-year term. It will end in 2016, in accordance with the university’s statute. EHU was registered in Lithuania in 2006, following its forced closure in Minsk in 2004, and Professor Mikhailov was asked to continue to lead it in exile. He was elected by the university’s Governing Board, as required by the statute, and governs in accordance with its regulations.
We are, of course, pleased that the authors of both pieces agree on the importance of supporting EHU. We agree that EHU is unique in what it offers to students and scholars from Belarus and is a vital alternative that is worthy of the support it has been fortunate enough to receive from an international community of donors. We take very seriously their trust and expectations and are continually striving towards excellence.
European Humanities University
Belarusian Economy: New Threats to Macroeconomic Stability
In the first half of 2013, a deteriorating external environment became the core reason for a downturn in GDP growth. Despite the government implemented expansionary policy to spur growth in the GDP, the domestic demand could not fully compensate shrinking external demand.
Furthermore, stimulation of domestic demand against a downward trend in the foreign sector renewed external imbalances. The latter may ruin a fragile equilibrium in the financial markets and challenge macroeconomic stability.
GDP Growth
Belstat reported further downturn of the GDP growth rate: in January to May it amounted to 1.1% year-on-year against 2.5% year-on-year in from January to April. According to our estimations, it means that in May output contracted roughly by 3.7% on annual basis, and by 1.7% on monthly (seasonally adjusted) basis. Hence, the cyclical pattern of GDP seems to have changed during the last month: between late 2012 and March 2013 the economy showed signs of recovery, while since April it is likely to have fallen and entered a new slowdown phase.
From the demand side, household consumption still contributes to growth mostly. For instance, retail turnover (which is a good proxy for household consumption) grew in May by 19.6% year-on-year, having exceeded the growth rates in the first quarter and April.
A key reason for this confident growth is the intention of authorities to provide the growth of real wages. Some private companies that face a lack of skilled labour (due to labour outflow to Russia and other countries, amongst other reasons) contribute to the upward dynamics of wages as well. Such firms have to provide competitive wages despite losing the competitiveness of their products. Through this in April, real wages grew somehow (both on an annual and monthly seasonally adjusted basis) despite weakening growth and a deteriorating external environment.
Another major component of domestic demand – capital investments – displays volatile dynamics. After substantial growth in the beginning of the year, it has become much more modest in recent months. In May, it grew only by 4.6% year-on-year. This instability stems from the lack of financial resources for investments, while the government seeks potential options to spur the growth of investments.
So the domestic demand is growing, but nominal restraints after the currency crisis of 2011 has narrowed the effectiveness of its stimulation. Furthermore, its expansionary policy is tending to become more and more dangerous against a backdrop of deteriorating external environment. Given the reduction of external demand due to weakening growth in Russia and non-favourable environment at EU markets, such policy will lead to a further deterioration of net exports: first, through an additional demand for imports; second, through higher real unit labour cost, i.e. less competitiveness. Hence, in April merchandise the trade deficit increased almost tripled in comparison to March and reached $293.9m.
Non-financial Firms
The cyclical slowdown of GDP has nothing to do with the effect of a high statistical base of the previous year (which takes place due to extra export revenues from ‘thinners and solvents business’ in the first half of 2012). From the production side, all the industries of the economy contributed to the downturn of GDP growth.
For instance, trade – which contributed to GDP growth between January and April mostly – has shown decrease of the growth rate. Another growing industry – agriculture – faced growth downturn as well. All other industries, including manufacturing, demonstrated downward trends well, which however, is more concerning, as in their case the slowdown deepened rather the growth went down.
The branches of manufacturing displayed either downward dynamics, or just a slightly narrowed slowdown in their output. Production of machines and equipment and production of non-metal mineral products were two lucky exceptions from the common trend, as they succeeded to strengthen the growth rate of their output, although rather modestly. Finally, the gross value added (the output in basic prices) fell by 0.1% year-on-year.
Hence, net taxes on products were the item that made growth rate of GDP positive. The latter effect takes place at the background of deteriorating net exports, as more imports increases the tax base for VAT.
Non-financial firms reduced their output in May monotonously, trying to react to an already deteriorated external demand, although with some delays. Although the signs of this deterioration appeared a couple of months ago, a majority of Belarusian firms did not adjust their output to this trend. In some industries, the firms treated this shrinkage of external markets as a short-term one. In some cases, the government restrained adjustment in firms’ output because of its growth targets.
These output growth targets became the core reason for the problem of excessive inventories of finished products and the worsening profitability of non-financial firms. For instance, as of 1 May 2013 in manufacturing, the stock of inventories of finished products reached 82.4% for its monthly average output (an acceptable level for the manufacturing as a whole is roughly 45-50% of monthly average output).
Alongside this, the indicators of firms’ profitability during January to April were extremely low: they were much lower than in the previous year and close to the level of 2009, i.e. the peak of the global crisis. Adjustment of output in May allowed for a stabilising financial stance of the firms somehow, although it is still far from the level needed for their sustainable development.
Monetary Environment
In May, the National Bank of Belarus kept on softening monetary policy trying to mitigate the downturn of GDP growth. It reduced the refinancing rate by 2 percentage points down to 25% (later on in June it made further reduction down to 23.5%). Financial markets adopted this impulse rather rapidly and the interest rates on the main instruments in national currency went down. In some segments of the market, say, those of short-term deposits in national currency, interest rates went down much more substantially in comparison to the refinancing rate: from 30.9 down 23.9% per annum.
The banks reduced the rates so radically due to the high supply of such deposits, while the demand for loans at this level of interest does not match the supply. In previous months, when the National Bank carried out a stricter policy, the banks preferred to keep a definite amount of excessive liquidity. Given the softening monetary policy and expectations of further reductions in the refinancing rate, the banks seem to be increasing their propensity to borrow. In this case, they are reluctant to maintain excessive liquidity and prefer to reduce their rates on deposits.
The equilibrium at the financial market still seems to be fragile against rather fresh memory of high inflation and depreciation. Through this, a new wave of deposit dollarization – which might take place in case of further rapid reduction of interest rates – might be a threat to monetary equilibrium. In May, there was a first warning – the growth rate of households’ savings deposits (on annual basis) went down, which might signal that the current level of rates is getting close to its threshold.
Dzmitry Kruk
This article is a part of a new joint project between Belarus Digest and Belarusian Economic Research and Outreach Center (BEROC) – a Minsk-based economic think tank.
