Lukashenka Tours South-East Asia
On 22 March Belarus state leader completed his visit to Singapore where he was trying to find new markets. He spent a week in Indonesia and Singapore, together with a delegation of 80 people.
The state of the Belarusian economy is deteriorating, relations with the West and Russia remain complicated, the death of friends like Hugo Chavez and contradictions with Ahmadinejad made the Belarusian leadership to look for new partners.
The Belarusian authorities want to become a noticeable player in the South-East and to attract new money to the Belarusian economy. The ultimate goal is to find new trading opportunities matching those with Russia and the EU. Belarus signed contracts for $400 million.
For the three days of the visit to Indonesia, Lukashenka lobbied increase of mutual goods turnover by two-three times for the upcoming years. President of Indonesia Susilo Bambang Yudhoyono promised to consider the opportunities of investments in Belarus and accepted the invitation to visit Minsk for further negotiations.
The Belarusian delegation did not gain great success in Singapore. Although the parties did sign an agreement to set up one joint company, official Minsk wanted to get more in the form of investments. The Asian tiger has enough economic weight to become a noticeable player in Belarus. However, it does not hurry to do so, although the regime offers a piece of Belarusian state property that the Russians want so much – a minority stock of Belaruskali, one of the world's largest producers of potash.
The visit to the South-East Asia took place after the failed trip to St. Petersburg. Alexander Lukashenka was hoping to get from Vladimir Putin a $ 2 billion loan. The Russian Minister of Finance Anton Siluanov replied simply and ingeniously: “If Belarus carries out privatisation for $ 2.5 billion, there will be no need for a loan”.
The Russian refusal inspired the Belarusian state leader. Ruling politicians realise the importance of development of relations with countries outside of Europe. Due to such contacts, the Belarusian authorities gain international legitimacy and find partners who do not demand further integration or respect of human rights.
On 18 March, Lukashenka arrived to Indonesia for the first time in the history of relations with this country. On the one hand, the relations between the countries do not develop as quickly as the Belarusian authorities would like. In 2012, the goods turnover between Belarus and Indonesia amounted only to $132,2 million. Alongside with that, the Belarusian export still remains undiversified. Belarus shipped almost exclusively potassium fertilisers and tires to Indonesia.
On the other hand, Belarusian authorities can expect rapid start in the mutual trade. Belarus signed contracts for $400 million for the three days of the visit. According to Belta news agency apart from the traditional potassium fertilisers, Indonesia will get about 500 tipper trucks and 600 tractors manufactured in Belarus in the nearest years. Belarus also plans to earn about $150 million on shipment of milk products.
Indonesian President Susilo Bambang Yudhoyono announced that a group of businessmen would visit Minsk in the nearest future, and he would come to Belarus personally for further negotiations afterwards. Lukashenka mentioned cooperation in the military sphere separately. According to the new information provided by the Stockholm International Peace Research Institute, Belarus occupies place # 20 among the biggest exporters of weapons in 2008-2012.
The Belarusian authorities had been preparing this visit for several years. According to Lukashenka, the goods turnover is likely to grow by two-three times in the next several years. If official Minsk manages to open several joint-stock companies with Indonesia, it will become a great break-through for the Belarusian economy. In political sense, these contacts have little importance as the countries are located too far away from each other, and their spheres of interest at the international arena stay too different.
Success in the relations with Indonesia seems less important than the prospect of cooperation with Singapore.
The current state of the economic relations strives to the minimum: the goods turnover in 2012 made $26,5 mln, Singapore invested in Belarus only $730,000 for a year. The Belarusian authorities realise that Belarusian products cannot be competitive in Singapore. The regime hopes to set up joint companies (for example, in the IT sphere) or direct investments into the Belarusian economy.
During the Belarusian-Singaporean business forum the parties agreed to set up a joint company for production auto parts and fittings. As for the direct investments, Singapore has taken no decision so far. The speaker of the Singaporean Parliament will visit Belarus in the near future to see the Belarusian enterprises.
Also, Lukashenka met with President of the “Riyada Group” holding company, a member of the Bahrain royal family, one of the most influential women of the Arabian world Shaikha Dheya bint Ebrahim Al Khalifa. The parties agreed to set up a joint company in Amman and about shipment of the Belarusian goods to the Arabian countries.
Multiple-Vector of the Regime as a Guarantee for Belarus’ Independence
The regime deeply appreciates the relations with countries located far away from Belarus, countries which have quite different, but not contradictory political interests with Belarus. The Belarusian authorities want contacts with South America, Asia or Middle East to become a security cushion in case of deterioration of relations with Russia and the European Union.
When Lukashenka headed for the South-East Asia, the Belarusians started joking that the state leader “disclosed his multiple-vector nature”. The Belarusian authorities often use the concept of “multiple-vector nature” to underline importance of development of relations with all the countries of the world. Translated from the official Minsk’s language, it means creating a counterbalance to Russia.
Although in reality only the West can replace Russia for Belarus, the Belarusian authorities continue to look for new partners. The contacts with Indonesia or Singapore look a drop in a sea in comparison with the agreements with Russia or the European Union. However these relations create appearance of the regime’s independence and stabilise its positions in the negotiations with Moscow or Brussels.
Lukashenka: Enough Babbling about Privatization
Russian Deputy Prime Minister Arkadiy Dvorkovich visited Minsk on an official visit in February. A number of experts believe that in the near future, Lukashenka's regime will make important concessions to Russia and sell major enterprises to Russian companies in exchange of favourable terms of supply of crude oil from Russia.
According to them, Dvorkovich came to Minsk as a representative of a wholesale buyer of Belarusian enterprises. Together with First Deputy Prime Minister Vladimir Siamashka, Dvorkovich visited some major Belarusian enterprises: Minsk Automobile Plant, "Hrodna Azot" and Agricultural machinery plant "Homsielmash".
As the Russian Deputy Prime Minister said, the parties agreed that before the end of the month Russian companies would conduct negotiations with top managers of MAZ and "Hrodna-Azot" and agree on joint steps for developing cooperation.
Privatisation linked to Russian oil supplies?
During a joint interview, Siamashka said that the parties continued negotiations about supply of crude oil in 2013. According to him, even while the agreement has only been reached for the first quarter, Belarus expected receiving 23 million tons of crude till the end of the year. He pointed out that Russia proceeded from this figure as in the first quarter it would supply a quarter of the volume requested by the Belarusian side – 5.75 million tons.
The opinion that the Russian Deputy Prime Minister came to accept the surrender of Lukashenka is not justified. Options for cooperation which the Belarusian side is suggesting to its Russian counterparts do not envisage privatisation of major enterprises.
On the eve of his visit to Minsk, Dvorkovich said that Belarus should compensate losses of the Russian budget from the "solvents and diluents" business which is estimated in at least USD 1.5 billion in Moscow. He also stressed inadmissibility of nonfulfillment by the Belarusian side of its obligations to supply high-octane gasoline to Russia. However, he did not raise these acute questions of bilateral relations during the talks.
Siamashka, speaking about prospects of receiving crude oil from Russia, said once again that Belarus was fulfilling in full its obligations regarding supply of oil products to Russia.
What is on sale?
On February 26, speaking at a meeting of the Council for Business Development at the President, Lukashenka made statements which implied that Siamashka, by far, was not the only "Mr. No" in power in the matter of sale of enterprises to Russian companies.
In contrast to Russian companies, the Western business does not lay claims on purchase of major Belarusian enterprises. Clearly speaking of Russian partners, Lukashenka said:
We won't privatise anything in the lump. We even gave up on having a list of enterprises singled out for privatisation. Any enterprise can be privatised: "Belaruskali", which many put their eyes on, oil refineries, MAZ, BelAZ and others. However, these enterprises have very high price. For instance, the announced price of "Belaruskali" is 32 billion dollars, I can't reduce it. They don't want to buy at this price – fine. We aren't in a hurry. These are efficient companies.
Lukashenka's team understands well that sale of major enterprises would mean strong attachment to Russia and dependence from Moscow, including in political matters. He said: "If they babble about privatisation in the government, and it passes to society… Then, there is a question: so, do you want to sell out the country ASAP?"
Lukashenka said repeatedly that he would not allow, as he puts it, a "barbarian privatisation" which can be imported from Russia. However, among major Belarusian businessmen who are loyal to him, Lukashenka speaks about his vision of privatisation.
The group of personalities similar to Moshenski and Shakutin understands very well that Lukashenko's words that "there would be no privatisation among officials or selling enterprises cheaply to big businesses" are a pure and simple populism.
For Lukashenka, former chairman of a kolkhoz and political propaganda worker during the Soviet era, it was impossible not to tell words pleasing to the Belarusian television audience to common people sitting in front of TV screens.
Among the members of the Council, there are also people who manage the business of Lukashenko's family: Jury Chizh, director of "Triple" (export of oil products, manufacturing of building materials, construction, network of hypermarkets, network of restaurants and cafes) and Evhieni Shihalov, director of the trade house "Zhdanovichy".
The following words of Lukashenka may be seen as addressed specifically to those present: "Please come. All things being equal, we will give preference to our people. But it should be in honesty. This is why the national investor will exist. If somebody lacks money alone, so get together".
Conditions attached to privatisation
Lukashenka also provided criteria of who are "our people" and who are not.
First, private business must not finance opposition. He said: "If a businessman finances the "fifth column" or makes negative impact on society in some other way, I will see it as their involvement in political struggle, in struggle against the state. And this struggle has its own laws. Then, let such businessmen take no offence".
Second, the entrepreneurs must finance social programmes. It follows from Lukashenka's statements that businessmen must by sympathetic towards "suggestions" of the authorities to finance repair of streets, roads and buildings and give money to kolkhozes for sawing campaigns.
These words of Lukashenko are not addressed in the first place to his confidant businessmen. Shakutin, Moshenski or Chizh can hardly be suspected of intentions to finance opposition. This is a warning to entrepreneurs who, at best, will get crumbs from the pie of possible privatisation.
One can get very big troubles (up to closing down of business) for hiring an opposition activist, for giving a pack of paper to a regional branch of an opposition political party, for any assistance to an NGO, which is seen as the "fifth column" by the authorities.
Not only pro-European organisations belong to the “fifth column”, according to Lukashenka. At the beginning of May, 2010 he claimed that Russia was financing several opposition organisations. After that the offices of the “Tell the Truth” campaign were searched in 20 cities of Belarus on May 18.
Overall, Lukashenka's team gets additional reasons to believe that during this year Russia will not bring into focus the acute questions of bilateral relations. The suggestions to sell enterprises to Russian companies will be a probing of the Belarusian side's position and will not be accompanied by pressure.
Andrei Liakhovich is a contributing author. He directs the Center for Political Education in Minsk.