Belarus Leads the CIS in 2013
Belarus assumed the presidency in the Commonwealth of the Independent States (CIS) on 1 January 2013. This is the international organisation which was intended to replace the Soviet Union in 1991.
For politicians who formed their vision in the Soviet Union, the CIS remains a substitute of the former empire, although the organisation's existence serves little practical sense. Minsk is now officially the capital of the CIS.
Despite the marginal importance of the organisation, the presidency of Belarus will be a serious challenge for the Belarusian diplomacy.
For the twenty years of its existence, the CIS has achieved only the creation of a free trade zone and the impression of the integration in the post-Soviet space. Citizens of the Commonwealth member states move within its territory with no visas. The states also signed a series of documents which provides some useful opportunities for ordinary people, such as recognition of higher education certificates.
The Kremlin, as the integration initiator, has turned away from the CIS and has embarked on its own projects, such as the Customs Union or the Eurasian Union.
The history of the Soviet Union’s substitute
The leaders of the Belarusian Soviet Socialist Republic, Russian Soviet Federative Socialist Republic and Ukraine signed an agreement on 8 December 1991 in Belavezha Forest, in Western Belarus. According to the agreement, the Soviet Union had ceased to exist and the CIS was to take its place. Post-Soviet politicians created the Commonwealth of Independent States in order to prevent the Soviet Union from further downfall.
In the opinion of former president of Azerbaijan, Abulfaz Elchibey, today "Russia uses the CIS as a means of trying to preserve the old empire in a new form, inventing various mechanisms for that." The Kremlin retains the organisation. However, according to Elchibey, the CIS does not exist de facto anymore, as "a collective farm with no rights cannot possibly exist”.
Officially, nine countries are CIS member states: Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, and Uzbekistan. Two more countries – Ukraine and Turkmenistan – participate in the organisation in fact, but they have not ratified the CIS Charter – the necessary document for participating countries.
Georgia was a CIS member until 2009. However, on 12 August 2008, four days after the Russian-Georgian war started, President Saakashvili announced that Georgia was leaving the CIS. The Georgian Parliament supported this decision unanimously on 14 August.
The Baltic States never joined the organisation as they did not want to have much interaction with the former Soviet Union.
Belarus used to be one of the most developed Soviet republics. Read more
Belarus has promoted the re-integration of the broken Soviet Union since the very beginning. In the early 90s, the idea of re-integration was popular among Belarusians. Belarus used to be one of the most developed Soviet republics. Therefore, Belarusians wanted to get back to the “Soviet family” in order to improve their material situation. In 1991, 82.7 per cent of Belarusians supported the preservations of the Soviet Union at a referendum.
Belarusian plans for the presidency
On 5 December 2012, at the CIS summit in Ashkhabad, the Council of CIS State Leaders officially announced that Belarus would take the presidency of the organisation in 2013. The presidency rotates according to alphabetic order.
Belarusian officials will lead the sessions of the organisation’s common bodies for the next twelve months. Official Minsk will organise the work of the most important CIS institutions: the Council of State Leaders, the Council of Governments’ Heads, the Council of Foreign Ministers and the Economic Council.
Belarus has not presented the concept of its presidency or an events plan. According to Lukashenka, “The Belarusian presidency will work under the motto 'Integration for the benefit of the people: strengthening of good neighbourhood relations, development of ecological cooperation, expansion of cultural dialogue”. The CIS member states will pay special attention to ecology and protection of the environment.
The participating countries of the union pay fees in accordance with the indices of their participation in the CIS GDP. The CIS budget remains tiny for an integration union. The member states will spend only $22m for the functioning of the organisation in 2013.
According to BELTA news agency, in 2013 the Belarusian authorities plan to facilitate the development of a common informational field as a means of increasing inter-cultural and inter-ethnic cooperation, in the framework of the CIS. The MFA Spokesman Andrei Savinykh says that the Belarusian presidency will be concentrated on humanitarian issues: “The issues that are close to the people and influence their lives the most”.
During the year of the presidency, the Belarusian authorities will promote the development of common radio and television for all CIS countries, such as Radio Mir. Although the Belarusian MFA promises to promote the CIS work to the new qualitative level, we should not overestimate the importance of the Belarusian presidency. In 2013, the CIS member states are not going to sign any significant economic or political documents.
he CIS election missions pays no attention to numerous violations and falsification at the Belarusian elections Read more
Today, the most important feature of the CIS for Belarus lies in its international observation of elections. The CIS election missions pay no attention to the numerous violations and falsifications at Belarusian elections and always recognise them as democratic.
The CIS has no supra-national competencies. The structure mostly performs the function of a discussion forum for sharing opinions, not for taking decisions. Even the summits held in the framework of the CIS are considered simply opportunities to organise more important bilateral meetings simultaneously.
Back in 1994, the states signed an agreement for the creation of a free trade zone within the CIS. The agreement never came to life. There appeared a new agreement instead, which came into force this year. The former Soviet republics walked the path to the creation of a free trade zone for more than 20 years. Today, more and more politicians have realised that the CIS will not become a great integration project.
The Kremlin understands this. This is why Putin created the Customs Union and is on the way to creating the Eurasian Union. The CIS became the reason for solving many integration processes in the post-Soviet space.
The main difference between the old integration structures like the CIS or the Union State and the new integration projects lies in the economic domain. According to Putin’s plan, the integration of economies is the key to Russian prevalence at the post-Soviet space. If the Belarusian regime does not change its policy, Belarus will inevitably become a part of this new empire.
Chinese Enclave in the Heart of Belarus?
650 thousand Chinese will be building an industrial park near Minsk and they have already obtained working visas.
Yaraslau Ramanchuk – an ex-candidate for Belarusian presidency – has received this information from his own sources of information. Gazeta.ru, major Russian online media, also mentioned a similar figure which it obtained from government sources.
If the information is true, Belarus will soon have one Chinese for every 14 Belarusian and an a sizable Chinese town 50 kilometres from Minsk. Belarusian state officials deny this. However, recent Belarusian history has taught the Belarusian public to be sceptical of the government’s assurances. Moreover, the whole story about the Chinese-Belarusian Industrial Park rests under a veil of mystery.
Chinese-Belarusian Industrial Park
Already in October 2011 the Belarusian Ministry of Economy and China CAMC Engineering Co., Ltd. agreed on the creation of the Chinese-Belarusian Industrial Park in Belarus. Governments of both countries, China Exim Bank, and Belarusian Horizont Holding Management Company negotiated the project. Finally, on 5 June 2012 Lukashenka signed an Edict on the Chinese-Belarusian Industrial Park.
Under the Edict, the Park is going to occupy 8,048 hectares of the Smaliavichy region (Minsk district) and host high-tech and export-oriented companies. Electronics, biomedicine, fine chemistry and engineering will be among the Park’s priorities.
The estimated cost of the Park’s construction is about $30bn. Apparently, a great portion of this money Belarus is expected to come from China. Recently, Vice Prime Minister Anatoly Tozik has claimed China is already on the point of allocating $3bn for the Park’s development.
The large financial assets’ coming from China to Belarus are not as rare as might be expected. By now, loans from the Chinese have enabled different state ministries to implement a couple of investment projects. China investments have flown into Belarusian power generation and clean energy. By 2014 in the centre of Minsk a new Chinese hotel complex “Beijing” is going to arise thanks to a Chinese investor.
But as a rule, money from the Celestial Empire arrives in the form of tied loans. Under such loan arrangements, Belarus does not only use the money for the purchase of Chinese equipment, but also as remuneration for Chinese workers. From a financial point of view, the situation with the Chinese-Belarus Industrial Park represents a new stage in relations between two countries.
Belarus’ Alluring Proposals
According to the presidential edict, the Chinese-Belarusian Industrial Park will become the most favourable place to do business in Belarus. More importantly, the Chinese-Belarusian Industrial Park has borrowed and enforced the effective incentive of High-Technology Park: taxation privileges.
Probably the most tempting perspective are the exemptions from profit, land and real estate taxes granted to all the Park’s residents for its first 10 years. In addition, the income tax of the Park’s employees is going to be a quarter less than for other Belarusians.
Under the Edict the Industrial Park Development Company can acquire the Park’s lands with a 50% discount and even dispose of it. At the same time 60% of the Industrial Park Development Company’s charter belongs to China's CAMC Engineering Co., Ltd.
Goods produced by Chinese companies in Belarus will benefit from the same special treatment in Russia and Kazakhstan as usual Belarusian goods. For example, a major Chinese automaker Geely has already become the Park’s resident.
Production of competitive automobiles in Belarus seems to disappoint its larger neighbour. Already, in June 2012 the Russian Ambassador to Belarus Alexander Surikov said that Belarus’ intent to start production of Chinese automobiles can become “a matter of serious discussions”. “We do not want to destroy our Russian automobile industry. And that is the whole issue”, – said Surikov.
Russia’s claims against automobiles’ construction have no legal foundation. Alexander Surikov admits: “Of course, we cannot forbid Belarus from assembling someone else's automobiles, but we note that some questions will arise […]”.
Unfortunately, Belarus still depends on Russia’s favourable disposition, primarily expressed in the form of subsidised energy resources. That makes Belarusian authorities look for compromises. According to some Belarusian media, the state is now making concessions to Russia within the negotiations on merger of Belarusian MAZ and Russian KAMAZ, two post-Soviet giant automobile plants. While the merger’s question has been on the allies’ agenda since 2010, this November they deadlocked again.
Still, in case of Chinese motor industry’s success in Belarus, such concessions may not suffice.
Even more, Russia can succeed in attacking the Park’s privileges from a legal point of view. The tax privileges Belarus provides to the Park’s residents may qualify as state subsidies. At the same time some international commitments of Belarus, such as the Common Economic Space’s Agreement on Unified Rules on Providing Industrial Subsidies, limit the possibilities of such state subsidies’ use. Consulting the Common Economic Space’s Commission on the permissibility of such measures in advance seems to be the only reasonable step Belarus can take now.
The new project has lead to inner turmoil as well. The first wave of dissatisfaction came already in January 2011. Inhabitants and summer residents of the future Park’s territory protested against the construction.
At first, the reason was the fear of demolition of people’s houses.
The fear grew into a mass movement. The citizens protested not only against the need to leave the settlements, but against the whole building of the Chinese–Belarusian Park. In their opinion, it will also threaten the region's ecology. One of Belarusian opposition political groups, "Tell the Truth" campaign, managed to attract the public’s attention to the problem.
Belarusian officials, including Vice Prime Minister Anatoly Tozik and the Head of Minsk District Executive Committee Boris Batura, had to make numerous assurances. However, the campaign failed to implement its more ambitious goal: to hold a local referendum on whether the Park should appear. Probably, the possible result of the referendum was too obvious and undesirable for the state.
The people’s strong dissatisfaction spread even far beyond the Smaliavichy region after Yaraslau Ramanchuk announced that 650,000 of Chinese are going to immigrate to Belarus for working in the Park. Russian Internet resource Gazeta.ru mentioned 600,000 Chinese. However hospitable Belarusians may be, such a change in the country’s ethnical situation seems quite shocking. The total population of Belarus is less than 9.5 million people.
The state authorities have denied the news. According to Tozik, 600,000 people is the approximate total number of employees of the Park (including Belarusians). Time will show whether the giant Industrial Park with hundreds of thousands Chinese workers will become a fact or a myth. In the past, Belarus has negotiated many large-scale investment projects, most of which failed to materialise.