Belarus Space Odyssey
On 31 December 2012 Alexander Lukashenka announced that Belarus had become "a space nation". In other words, it had entered a club of countries having their own guided objects in space.
The Belarusian ruler meant the launch of the first Belarusian satellite that took place on 22 July 2012 at the Baikonur cosmodrome. But many consider the launch to be little more than a PR action.
Actually it was not the first attempt by Belarus to join the club of "space nations." Six years earlier, on 26 July 2006 the Russian carrier rocket "Dnepr" with Belarusian satellite "BelKA" crashed after an unsuccessful launch.
The failure was shameful for Belarusian authorities. Lukashenka himself visited the Baikonur cosmodrome to observe the launch and with his own eyes observed the misfortune. Later, the investigation showed that the problem was not in the Belarusian satellite but in the combustion chamber of the carrier rocket. Nonetheless, that failure badly spoiled the mood of Lukashenka.
The Second Attempt and New Plans
Soon after the events of the July 2006, Belarusian officials announced: "There is going to be a second attempt". Independent experts criticised the idea. Some said that a small country like Belarus did not need expensive space projects.
Finally, after many postponements, on 22 July 2012 the successful launch was carried out. This time Russian rocket Soyuz-FG successfully launched into orbit the Belarusian satellite named "BKA".
The time of the satellite is set to function is five years. If Belarus had to pay the market price for the whole project, it would have cost $100m. But they launched BKA at a serious discount thanks to Russia. The total price tag reached only around $17m, which looked more like sponsorship than ownership.
Soon after the launch the government revealed new cosmic plans: Belarus will produce its own satellites and will soon start another launch project in cooperation with Russia.
The Advantages are Overrated
The news really inspired government experts and officials. "Belarus has become a space nation", – they proudly announced, as if they foresaw Lukashenka’s annual New Year's speech. The data from the satellite might be useful for agriculture, geodesy, cartography, combating forest fires and generally for the work of the Ministry for Emergency Situations – they predicted.
After some time, the first pictures from the satellite arrived. The satellite photographed Mozambique and Bahrain. After that, the advocates of the idea claimed that the Belarusian satellite would be even profitable: pictures can be sold to foreign customers.
Proceeding with self-praise, the National Academy of Sciences declared that several potential customers had already expressed some interest to the pictures from the Belarusian satellite. Among them: old friends Venezuela, Azerbaijan, Ukraine, Kazakhstan and even Google. The latter, as was later honestly admitted, agreed only to consider whether it needed products from the Belarusian satellite.
And then came the silence. Not a single foreign customer has bought pictures from the satellite. Nothing has been heard about the usage of satellite in agriculture or by the Ministry for Emergency Situations. We can presume that if such cases indeed occurred officials would have proudly told about them. Hence, the reverse is likely the case.
Vladimir Belyakovsky, a manager from Peleng, a company that took part in manufacturing the satellite, admitted that such space projects were seldom profitable. The only more or less sound guarantee of the Belarusian satellite's payback was low initial costs due to the favourable conditions, provided by Russia.
With regards to prestige, today the status of "a space nation" is quite a common thing among more or less developed countries. Around 60 states including most of Belarusian neighbours are in the club. Having ones own satellite was a privilege half a century ago. Now it is just something that states possess if they need it. So the point of pride is a bit weak.
The True Motive is Self-Satisfaction
Since the time of communism , space exploration has been more than a mere branch of science and economy. Soviet party leaders did their best to foster the development of space technologies. While the country suffered heavy food deficits nobody dared to cut down on financing for space projects.
The same is true for today’s populist dictatorships. Belarusian fellow members of the "space nations" club are Iran and North Korea. In the meantime, thousands North Koreans die of starvation. What is also really symbolic, the first North Korea’s satellite was also launched in 2012.
Commenting for BelarusDigest, Belarusian economist and an ex-candidate for presidency, Yaraslau Ramanchuk named several points of governmental motivation for the space programme: "Lukashenka’s pride, lobbying of the National Academy of Sciences and a false idea of technical and technological progress. And maybe even an illusion of some kind of possible safe means of communication without the Kremlin listening to secret talks".
An Example of Window-Dressing
The willingness of wasting money on "prestigious" projects is not limited only to Belarus' space ambitions. The history of Belarusian-Russian relations has seen many cases of dumping money just for producing an image. Globally, the whole project of "the Union State" among two nations is a project of this kind.
Belarus contributes 35% to the budget of this organisation, which in figures will be around $2bn (out of $5bn) during the 2013. These funds are used to finance numerous supranational entities, bodies and their projects. For more than 15 years this organisation has been a perfect example of how two populist governments can waste peoples’ money in order to feed their nostalgic illusions.
One of the most glaring examples of such "fruitful" partnership is a project "Union TV-set" dating back to 1999. By means of this programme two governments wanted to support the moribund branch of TV-sets production. The collapse of the Soviet Union resulted in a serious production crisis in this sphere.
The investments in this branch reached tens of millions of dollars. But the market was already captured by foreign cheap and high-quality TV-sets. Enormous money injections in out-of-date plants without their modernization resulted in failure. The folding of the project in 2001 entailed mass dismissals at the related Belarusian enterprises.
Now back to space. The Belarusian government has introduced another Russian-supported project with obscure aims. The lack of practical results together with the critical experts’ estimations brings to an unpleasant conclusion. The satellite launch was done mainly for the sake of the traditional window-dressing.
Whether the state of the Belarusian economy can sustain expensive technological prestige projects does not seem to bother the Belarusian leadership.
Top 5 Negative and Positive Events in Belarus of 2012
The outgoing year of 2012 has left a contradictory record in the modern history of Belarus.
It has seen numerous events that came as a real shock for Belarusians and foreign observers – primarily in the economy and politics. At the same time, 2012 gave the nation several moments of pride and satisfaction. However, with the exception of sport victories abroad, positive events of the year came as a mixed bag.
Below is a list of the top 5 negative and top 5 positive events that happened in the Belarusian economy and society in 2012. Belarus Digest reported about most of them throughout the year. Here is a retrospective glimpse at them.
On the Negative Side
1. Unprecedented growth of solvents schemes
The Know-How of the Year award undoubtedly goes to the solvents exporting scheme that the Belarusian government exploited with great enthusiasm until the Kremlin stopped in August. The authorities in Minsk and their partners in Russian business circles found a loophole in the legislation of the Customs Union of Belarus, Kazakhstan and Russia.
They disguised oil products as solvents and exported them in large quantities to the EU, predominantly to the Netherlands and Latvia. This way Belarus avoided paying export tariffs on oil products back to the Russian budget, because the Customs Union’s laws do not classify solvents as oil products and do not establish any export tariff on them.
This became a tricky path to economic growth for Belarus. The country saved about $2bn, which significantly helped to solve the problem of the trade balance deficit and eased pressures on the national currency. However, the easy money which came from exporting solvents took the issue of economic reforms off the government’s agenda. Solvents became a sort of alcohol that obscured the Belarusian authorities’ consciousness. And the hangover might be extremely painful.
2. Shocking nationalisation of Spartak and Kommunarka chocolate factories
The Most Shocking Event of 2012 happened in October when Alexander Lukashenka nationalised two leading chocolate producers in the country, Spartak and Kommunarka. He claimed that the owners and managers of the factories duped the state and all Belarusians by engaging in criminal production and export schemes. In Lukashenka’s own words, he had to restore justice and defend the interests of the people.
The nationalisation got extensive coverage in the international media and significantly damaged the investment climate in Belarus. No surprise that the ambitions investment forum that took place in Minsk a month later did not result in any investment projects despite the government’s high expectations.
3. Introduction of a new form of serfdom
The Madness of the Year prize can be awarded to Presidential Decree No.9, signed in early December. The decree essentially legalised a new form of serfdom in Belarus. It tied workers to their workplaces. Now they can only quit their current jobs with the permission of their boss. Otherwise, they will have to pay the state or be subjected to forced labour. At the moment this affects fewer than 20,000 employees. But many fear that the decree might well become a model imposed across the whole economy later.
No doubt the decree violates the rights of employees, which Belarusian and international labour unions quickly pointed out. But Lukashenka thinks that this is the only remaining option to make state-owned wood-processing factories modernise themselves. In fact, this is rather a sign of the Belarusian government’s growing dysfunctionality.
4. No lessons learned: salaries grew fast again
The obvious favourite for winning the Worst Student nomination is the Belarusian government for their failure to learn the major lessons from the 2011 economic crisis. Or to be more precise, for the failure to put into practice what they learned.
In the first half of 2012, Lukashenka and other top officials kept reminding the public that salaries in the country should no longer grow faster than the labour productivity indicator. They rightly concluded that the administrative increase of salaries in 2010 had been one of the factors that led to the macroeconomic collapse of 2011.
Nonetheless, in practice the government became more concerned about bribing the electorate before the parliamentary election in September. Raising salaries is a typical way of doing this. As a result, real wage growth surpassed the corresponding dynamics of labour productivity. In January-October 2012, according to the Belarusian Statistics Agency, the former grew by 18.1 per cent and the latter – by only 4.3 per cent.
5. Prompt executions of convicted terrorists that raised suspicions
The Suspicion of the Year prize should be awarded for the executions of Dzmitry Kanavalau and Uladzislau Kavaliou, whom the Supreme Court sentenced to death for organising the terrorist act in theMinsk metro in April 2011. The trial itself caused hot debates both domestically and internationally. Many observers claimed there were numerous procedural violations by the court and on those grounds questioned its decision. Others approved of the harsh sentence.
But the very prompt executions of the convicts looked suspicious in the eyes of all. Opinion polls conducted later revealed a growing number of Belarusians who oppose death penalty and who see the government’s actions as unjust. The executions also intensified Belarus’s conflict with the EU.
On the Positive Side
1. Macroeconomic stabilisation
Very few economists believed that the Belarusian authorities would be able to stabilise the macroeconomic situation after the crisis of 2011. But the government did manage to provide some fragile stabilisation.
It is, of course, difficult to talk about proper stabilisation when inflation reached almost 22 per cent. But compared to the 108.7 per cent a year before, this looks like an achievement. The same can be said of the national currency. After the three-fold devaluation in 2011, in 2012 the Belarusian rouble appeared more reliable.
However, as said above, the fragile stabilisation has to do not with any prudent reforms but rather with factors like the solvents exporting schemes. And this leaves no grounds for future optimism. In any case, the government gets the Stabilisation award.
2. Improved business climate in small and medium-sized towns and rural areas
The Best Piece of Legislation prize goes to Decree No.6 that Lukashenka signed in May. It became one of the most advanced legislative decisions that the incumbent has ever made. Essentially, the decree established an enormous special economic zone that is spread over half of Belarus’s territory.
Unfortunately, this is also a “half-happy event”. In the background of terrible implementation practices and barbarian acts like the nationalisation of Spartak and Kommunarka, Decree No.6 can hardly make a real difference.
3. Proclaimed administrative reform
A good candidate for the Hope of the Year award is the administrative reform that Lukashenka proclaimed in October. After long deliberations he appointed a commission to think about how to reduce government bureaucracy by 25-30 per cent and draft reforms of the government apparatus.
There is very little probability that such a reform will ever take place and be successful. Lukashenka will inevitably face strong resistance from his “power vertical”. Moreover, it is highly doubtful that the man who is constantly expanding state powers will ever be able to cut his own red tape. But the idea of administrative reform certainly points in the right direction.
4. Historical football victory
The Dream Come True award goes to the FC BATE Borisov. Its performance in the 2012 football Champions League made the whole world talk about Belarus. On 2 October the club from a medium-sized town near Minsk defeated the legendary Bayern Munich. This was the best achievement of any Belarusian football club since the country gained independence.
BATE Borisov brought pride and happiness to Belarus. It was one of those few occasions when the country featured in international news without its notorious tags of “dictatorship”, “economic crisis” or “diplomatic rows”.
5. Our No.1 in the world
Finally, the Achievement of the Year award goes to Belarus’s major sports star, Victoria Azarenka. For the first time ever a Belarusian tennis player climbed to the very top of the world tennis rankings. This happened in January after Victoria defeated Maria Sharapova (whose parents also come from Belarus) at the Australian Open.
Victoria did not win any other Grand Slam tournament in 2012. But she got close on a number of occasions. She also took a bronze medal in the individual tournament at the Olympic Games in London and won gold together with Max Mirny in the Olympic’s mixed doubles. As a result, Azarenka remained No.1.
Let us hope that the 2013 will bring significant positive events not only achieved by Belarusians abroad, but also at home.