2016 Ostrogorski Forum: Can Belarus be Neutral in the Shadow of Russia?
On 29 June the Ostrogorski Centre held the first Ostrogorski Forum on foreign policy and security in Minsk.
The theme of this year's conference was 'Inertia, strengthening neutrality or changing the foreign policy orientation? Foreign policy in Belarus at the present stage'.
The programme featured prominent Belarusian experts, both pro-government and independent, as well as government officials and academics from state universities. Researchers from leading Belarusian think tanks presented their papers and were critiqued by experts with opposing political orientations. The research papers were supported by the grant from the Mott Foundation and jointly implemented by the Pontis Foundation and the Ostrogorski Centre.
The Ostrogorski Forum is expected to become an annual event to promote professional and respectful dialogue between experts with different political views. This article provides a summary of the key themes of the Forum in English as well as full-length videos of the event in Belarusian.
Key messages of the 2016 Ostrogorski Forum
A number of speakers spoke of the need to view Belarusian foreign policy in a less binary way: more attention should be paid to the real interests of Belarus rather than the confrontation between Russia and the West. A more pragmatic and less ideological approach may help foster better relations with all of Belarus's neighbours and live up to the principle of neutrality enshrined in the Constitution of Belarus.
At the same time both pro-opposition and pro-government experts agreed that Russia would not permit Belarus to cross certain red lines, the most important of which being leaving Moscow-promoted integration initiatives such as the Eurasian Economic Union. An obvious geopolitical re-orientation could trigger a reaction from Russia resembling its actions in Ukraine.
The ability of Belarus to resist a Donbas-like scenario caused significant debate. Some argued that compared to Ukraine Belarus is less corrupt, and its military and state administration remain in much better shape. On the other hand, the weak national identity of Belarusians, the large number of Russian-born and educated senior military commanders, and the pervasiveness of Russian media make Belarus look weaker.
Most participants agreed that the domination of Russian media in Belarus represents one of the greatest challenges to Belarusian statehood. The popularly of Russian media is explained not only by generous funding but also by the fact that Russia has strongly articulated messages on its foreign policy, internal politics, and security. Belarus, on the other hand, has very few issues where it articulates its position; Belarusian media do not have their own message. This explains why many Belarusians supported the invasion of Crimea in 2014.
The participants also disagreed as to whether Moscow might soon become more assertive in Belarus given its deployment of troops close to the Belarusian border. Some argued that Russia is signalling its readiness to intervene in Belarus on short notice, while others thought that Belarus has done nothing to provoke Russia and Russia's interest are already protected in the country.
Some experts argued that Russian integration projects in the former Soviet Union will die a natural death. With the prices of oil and gas remaining low and a lack of modernisation and foreign investments in the region, integration projects become increasingly unattractive, which may explain why Russia increasingly resorts to the use of force or threats of force abroad.
The main threat to Belarusian statehood comes from a lack of pluralism in Belarusian political institutions. With no representatives of the opposition allowed in the parliament, courts, or executive, the statehood of Belarus is fragile. Allowing more pluralism in Belarus's political institutions would help Belarusian society reach a consensus on issues of critical importance for Belarusian statehood and independence. Allowing moderate representatives of the opposition into parliament would be a small step in this direction.
Ostrogorski Forum: introduction
Speaker: Yaraslau Kryvoi, Director of the Ostrogorski Centre, Editor in Chief of Belarus Digest
Soft power of Belarus in the region: assessment of potential impact
Speaker: Dzianis Melyantsou, senior analyst of the Belarusian Institute for Strategic Studies.
Opponent: Aliaksandr Shpakouski, director of informational and educational institution "Current Concept".
Moderator: Artyom Shraibman, political observer of TUT.by and associate analyst of the Ostrogorski Centre.
Russian-Belarusian relations after the conflict in Ukraine
Speaker: Ryhor Astapenia, development director and analyst of the Ostrogorski Centre.
Opponent: Uladzimir Snapkouski, professor of the Faculty of International Relations, Belarusian State University.
Moderator: Andrei Dynko, chief editor of Nasha Niva newspaper.
Challenges to Belarusian foreign policy and CIS countries after 2008
Speaker: Andrei Valodzkin, researcher at the Institute of History of the National Academy of Sciences of Belarus.
Opponents: Arsen Sivitski, director of the Center for Strategic and Foreign Policy Studies; Aliaksandr Filipau, Dean of the Faculty of additional education of the Belarusian State University of Culture and Arts and analyst at the Liberal Club.
Moderator: Yaraslau Kryvoi, director of the Ostrogorski Centre.
Neutrality: ideal or reality
Speaker: Siarhei Bohdan, a doctoral student of the Free University of Berlin and associate analyst of the Ostrogorski Centre.
Opponent: Valer Karbalevich, expert of the analytical centre "Strategy".
Moderator: Vital Tsyhankou, journalist of Radio Liberty.
Geopolitical orientation of Belarusians: sociological analysis and survey
Speaker: Andrei Eliseyeu, analytical journalist of the portal BEL.BIZ
Opponent: Alena Artsiomenka, analyst of the Belarusian Institute for Strategic Studies.
Moderator: Andrei Aliaksandrau, chief editor of the online resource Belarusian Journal.
The Midterm Exam for the Economy: Digest of Belarus Economy
On 19 July 2016 the National Statistic Committee of Belarus (Belstat) has announced the macroeconomic results of the first half of the year. The figures disappoint – economic growth still in the red zone.
Moreover, the Eurasian Development Bank has warned that the Republican budget requires additional cuts in order to sustain the acceptable level of state debt.
Finally, on 27 July 2016 the new round of Belarusian-Russian negotiations on gas prices and gas debt payment was held in Moscow.
Economic Growth: Leaving Plans for Christmas
In the first half of the year, the government planned to withdraw the economy from recession. However, actual results still dissatisfy. According to Belstat for the first half of 2016 GDP of Belarus has decreased in comparison with the previous year by 2.5 per cent and once again missed the official forecast this time by 2.6 per cent.
Such a reduction of economic growth still took place together with the weak domestic demand and demand from Belarus's major trade partners – the exports of goods dropped almost by fifth part accompanied by a significant slowdown in the growth of the physical volume of industrial production (see figure 1).
Meantime, Belarus' officials still have an optimistic view on the assessment of current macroeconomic situation. On 26 July 2016 the Prime Minister Andrei Kobyakov has announced that in the first quarter of 2016 the plan for creation of new jobs was exceeded by almost 2 times.
However, according to Belstat the number of work places in Belarus continues its reduction eight month in a row. In the first half of the year 341 thousands of Belarusians lost their jobs and outperform the number of employed by 81 thousands.
Additionally, the attraction of foreign investments in Belarus show little progress. For example, the number of new residents in the widely boosted Chinese-Belarusian industrial park "Great stone" still has not increased.
For two previous years the "Great stone" has attracted only eight residents and in the first half of the 2016 – zero. Moreover, only few currently registered residents began to implement the announced projects.
One of the main reasons that restrict the flow of foreign investments in Belarus tried to explain the British Ambassador in Belarus Fionna Gibb. She thinks that the Belarusian authorities do very little to overcome such situation. According to her, British companies avoid investment, because our country remains quite a closed country and business is not ready to take big risks.
State Debt: Resetting the Race
By the end of June the international reserves of Belarus increased by 7.3 per cent in comparison with first month of the year and amounted to $4.8bn (see figure 2). This number has already outperformed the official forecast for the whole year by $24m indicating the success of monetary policy realized by NBB in recent month.
However, this amount of international reserves remains at one of the lowest levels in recent years, which indicates that Belarus still possesses inadequate resources needed for the maintenance of its economy, and makes the problem of attracting additional capital not only from Russia still very difficult.
On the same time after two month of decline the state debt of Belarus has resumed its growth increasing by 7.4 per cent in comparison with the start of the year. The main source of growth falls on its external part taking into account the first $500m tranche of credit from the Eurasian Fund of Stabilization and Development.
However, in the second half of the year the internal part also will add up some additional pain. According to NBB since the beginning of year the volume of problem assets in banking system has increased by two times and reached 13.4 per cent growing already for eight months in a row – a historical maximum for the Belarus.
This situation occurred due to substantial granting of loans on preferential terms for mostly loss-making enterprises. In order to solve this problem the government will be forced to increase borrowings in the internal market.
Energy Sector: Monetizing the Negotiations
Meantime, on 27 July 2016 the new round Belarusian-Russian negotiations on gas prices and gas debt payment was held in Moscow. According to Russian side the debt of Belarus for gas has reached $270m since the beginning of the year.
Belarus' authorities believe that the price should be lower since energy prices are getting cheaper on the world market. Besides that Russia itself has lowered price for some consumers, for example, Armenia, but unwell to reduce price for Belarus.
Price for 1 thousand cubic meters of gas for Belarus is $132. While Belarus considers a fair price equal to $73. The main argument of Minsk stays the intergovernmental agreement in which it is written that for Belarus should be applied equal prices (export price minus transportation).
Meantime, in order to force the decision Russia has reduced oil supply to Belarusian refineries by 37 per cent. Due to such a sudden strike estimated losses of Belarus may rich additional $200m per quarter significantly outperforming the amount that Belarus saves on the price of gas.
Furthermore, the negotiations were complicated due to extra conditions that Russia put forward, namely to revive the previously announced privatization projects (MAZ, Grodno-Azot and other enterprises).
Summing up, the government still waits playing with gas bargaining and new coins arrived after denomination occurred on 1 July 2016. While it helps to avoid painful structural reforms and spend some time in the shuffle, it still little contributes to restore the shrinking economy.
Moreover, such situation may additionally transform into even harder problems in the next year – slowing down economy driving at a first gear cannot easily switch to higher one without improvements in labour productivity, innovation and entrepreneurship.
Aleh Mazol, Belarusian Economic Research and Outreach Center (BEROC)
This article is a part of a joint project between Belarus Digest and Belarusian Economic Research and Outreach Center (BEROC)