Moscow Pushing for an Air Base, Protecting Transport Infrastructure – Belarus Security Digest
Despite the worsening situation in the region and Alexander Lukashenka's bellicose rhetoric, spending on national security will not see an increase in 2015. Even common threats have failed to unite post-Soviet countries: leaders of CSTO countries more often than not can engage in talking more than action.
CIS countries are concerned about the security of their transportation infrastructure, fearing the consequences of terrorist attacks on major transportation hubs. Belarusian aircraft manufactures hope to enter international markets with help from the Russian United Aircraft Corporation.
Moscow wants an air force base, Minsk pretends not to hear its calls. On 23 December 2014, the defence ministers of Russia and Belarus met. The Russian side has again publicly voiced the idea of increasing its military presence in Belarus. At the same time, the wording of the statement was rather vague: to increase the number of aircraft and helicopters at an air force base in Belarus without specifying the legal status of this base.
It is unclear whether this wording was unintentional, or it was a result of Minsk' unwillingness to formalise legally the creation of a Russian base. It should also be noted that the Belarusian sources omitted the topic of build-up of Russia's military presence in Belarus. This phenomenon has already become tradition.
CIS security services seek to protect its transportation infrastructure. On 5 December 2014, the CIS countries signed a protocol on cooperation in the field of protection of transport infrastructure and vehicles against acts of unlawful interference. The drafting of a coordinated policy of development of transportation networks and a build-up of international transportation corridors in the CIS are among the economic priorities of the Commonwealth.
Meanwhile, up to 70% of the terrorist attacks in the world take place in transport or using the vehicles. A shutdown of a major transportation hub due to sabotage can cause environmental and economic damage. The security of transportation sites and infrastructure are among the priorities of the security services and law-enforcement agencies of the CIS countries. A coordinated strategy of countering terrorist activities in transportation supports their claims to deal with the issue.
Back in November, CIS countries discussed protecting transportation infrastructure against terrorist attacks.
The State Border Committee keeps the border locked tight. On 5 December 2014, Alexander Lukashenka received Leanid Maltsau, Chairman of the State Border Committee. They discussed optimising the agency's operational structure and the border infrastructure's general layout. They also focused on the border with Ukraine. Leanid Maltsau said that the state of the country's border security was stable, but the State Border Committee was prepared to face any changes should they arise.
The optimisation of the operational structure of the State Border Committee allowed strengthening the national border's security, including with Ukraine, and deploying additional forces (two border guard outposts near a nuclear power plant under construction and a new border guard detachment in Mazyr). The head of the State Border Committee reported the introduction, in addition to UAVs, of rapidly deployable alarm systems and other equipment, "which would permit for the protection of the state border… with smaller forces but more reliably".
The level of interaction within CSTO is low. The situation on the CIS' southern border remained in the spotlight of the latest CSTO summit. The statement by the President of Tajikistan Emomali Rahmon deserves special attention. He said that his country looked forward to the full implementation in 2015 of the decision by the CSTO's Collective Security Council "On providing assistance to the Republic of Tajikistan in reinforcing the Tajik-Afghan border" adopted on 23 September 2013.
Moreover, the need for this kind of assistance has increased in light of the situation in neighbouring regions. Emomali Rahmon pointed out that Tajikistan acted as a buffer for the entire post-Soviet space from the threats of terrorism, arms and drugs smuggling. Thus, it is entitled to effective assistance from its CSTO partners.
Judging by the fact that the CSTO countries failed to implement their decision on assistance to Tajikistan in protecting the border with Afghanistan for over more than a year since its adoption, as well as taking into account Emomali Rahmon's pleas, cooperation between CSTO countries leaves much to be desired. There are doubts that the assistance to Tajikistan will be rendered on time and in full. In general, the lack of commitment in implementing agreements is a characteristic feature of all post-Soviet alliances.
Aircraft manufacturers from Belarus and Russia are making joint plans for the future. The Concept of Development of the 558th Aircraft Repair Plant with the United Aircraft Corporation (Moscow) until 2025 was recently approved. The purpose of the document is to preserve the standing of the Belarusian enterprise in the market for repairing and modernising aircraft as well as its integration into the international aircraft complex of aircraft manufacturers.
The integration with the United Aircraft Corporation will allow the 558th Aircraft Repair Plant to take part in the manufacturing programmes of the corporation, to get access to modern technologies of aircraft engineering and to set up the integrated system of production to ensure the maximum economic benefit.
The fundamental issue is whether or not the United Aircraft Corporation will acquire a share of the 558th Aircraft Repair Plant, and if yes, how big of a chunk it will be. Earlier, the Russian party expressed interest in purchasing shares of the Belarusian manufacturer. Taking into account the war of sanctions between Russia and the West, an agreement of this sort may be crucial for the Belarusian aircraft manufacturer.
Budget-2015: no money for the silovikis. Analysis of the expenditures for the 2015 budget show that no fundamental changes in funding for law-enforcement agencies took place compared to last year. Meanwhile, this might have been expected taking into account the security situation in the region, the forthcoming presidential election and Lukashenka's bellicose statements during 2014. Moreover, it is doubtful that even the existing figures will be implemented because of the financial crisis. A high probability remains that the 2015 budget will be revised by the autumn.
New plan for state defence approved. In this regard, one should pay attention to a meeting of the Security Council of Belarus held on 16 December 2014. During this event, Alexander Lukashenka approved the plan of state defence for the next 5 years. The plan of state defence is a classified document.
As stated, the plan of defence has been developed under the direct supervision of Alexander Lukashenka "taking into account an in-depth analysis of the situation… in the world… and specific aspects of wars and military conflicts in recent years".
Lukashenka's emotional statements about the policies of Russia and the West accompanied the Security Council meeting. He emphasised "strengthening intelligence activities and the deployment of military facilities in Poland and the Baltic States" of the NATO alliance.
All of this confirmed that Belarus, according to Lukashenka, needed to develop and strengthen its defensive capabilities. However, "today's behaviour by our eastern brother cannot but cause alarm. Nevertheless, we refrain from drawing any conclusions from it… before speaking to the President of Russia". He said that the main threats were in the economy.
Andrei is the head of “Belarus Security Blog” analytical project.
Belarusian Machine Building: Once a Nation’s Pride, Now a Burden?
In Soviet times, machine building was a driver of economic growth in Belarus. It is not so today.
According to the Ministry of Finance, the Belarusian Automobile Plant, the Minsk Automobile Plant and the Minsk Tractor Plant lost $76m over a nine month period in 2014.
The decline in the industry has influenced the whole country. The state's economy suffers losses not only in the machine building sector itself, but also across the industries associated with machine building.
Wages of factory workers have been cut almost in half in 2014. And Belarusian diplomats have had their own share of embarrassment when Belarusian machines break down during presentations and ceremonies.
Belarus has no choice but to abandon its focus on the shrinking Russian market. The idea of privatising these enterprises by Western company may yet emerge among Belarusian decision makers. Keeping these enterprises in the state's hands costs too much and their privatisation by China or Iran, as previous projects show, may bring frugal results.
The Machine Building Crisis
Machine building, which was developed in Belarus after the Second World War, has long been considered the gem of Belarusian industry. The Minsk Automobile Plant has become one of the largest manufacturers in Eastern Europe manufacturers of heavy vehicles, buses and trolley buses.
Since its establishment the Minsk Tractor Plant has produced more than three million tractors. For many countries the "Belarus" tractor remains a well-recognised national brand. The Belarusian Automobile Plant makes some of the biggest dump trucks in the world.
Recently published statistics from the Ministry of Finance showed that now Belarusian mechanical engineering is having a serious problem. After the third quarter of 2014, the three giants – the Belarusian Automobile Plant, Minsk Tractor Plant, and Minsk Automobile Plant – have all become leaders in terms of sheer losses among all enterprises in Belarus.
The companies have filled warehouses and lowered there production. The production of dump trucks dropped by more than a third over 11 months in 2014 when compared with the same period in 2013. Reserves exceeded the average monthly production by more than four times. A Minsk Automobile Plant employee, who works in the busiest manufacturing bus lines, said to the TUT.by web-site that previously they made monthly 120 buses, now only 60-80.
|Belarusian Automobile Plant||~ $ 30m|
|Minsk Tractor Plant||~ $ 23.5m|
|Minsk Automobile Plant||~ $ 22.2m|
But now these losses are damaging the Belarusian economy, as their partner enterprises have no orders coming in. Employees at these plants now typically work four days a week and there was an extended New Year holiday at the Minsk Automobile Plant that lasted from 1 to 12 January.
Contrary to the former populist policy of the government, at this point wages cannot grow faster than the efficiency of the enterprises. As trade union activist Henadz Fiadynich says, if in spring 2014 the painters at the Minsk Automobile Plant earned about $700 in the spring, now they are earning $420. It is not much of a surprise that companies no longer pay workers any bonuses.
Why Belarusian Machinery Appears to be in Decline
In December the Minsk Tractor Plant and Minsk Automobile Plant got new directors, but these new individuals can hardly solve the structural problems of the enterprises. The Belarusian industry simply lacks sufficient funds for the development of new technologies.
Thus, the quality of the products are declining. The Belarusian Ambassador to France Pavel Latushka stated in 2014 that, "we have situations when our machines breaks down during presentations and what could be the credibility of such a product?”
Belarusian enterprises have failed to develop a successful marketing strategy. On top of the fact that there is no money to build maintenance garages throughout the world, the enterprises even lack enough sales offices outside the country to sell what they do have.
Valiancin Lopan, a PR manager who previously worked for the Minsk Automobile Plant, commented to Belarus Digest that the focus on the Russian market is to date a serious mistake on the part of Belarusian machine builders. According to a representative of the Minsk Tractor Plant in Russia, in the first half of 2014 product sales decreased by 11%. The other manufacturing giants may have losses even greater than this.
However, the demand in the Russian market has declined not only because of the crisis, but also due to competition. Many companies like Volvo, John Deere Rus, CAT, Komatsu, Terex have assembly plants in Russia.
Earlier, machines from the Minsk Automobile Plant was popular in developing countries because of their simplicity – the workers could fix the engines themselves. Now, engines are more advanced and full of electronic devices, and as a result Belarusian goods have lost their advantage.
Additionally, Belarusian enterprises have traditional problems associated with an authoritarian economic control model. Plants often supply their equipment to state-owned enterprises for free, public managers are afraid to be proactive and cannot pay enough money for innovation. Valiancin Lopan says that some engineers can innovate, but they want a lot of money for it.
What Can Help
Financial analyst Siarhei Chaly told Belarus Digest that Belarusian machine-building enterprises badly need strategic investors. And it seems that Lukashenka's regime does not trust either the Chinese or Iranians, whose enterprises in Belarus so far have yielded little in economic success.
For instance, over a five year period the Iranian company Samand produced about a thousand cars which were mainly sold to state organisations. Ford, which manufactured cars in Belarus in the '90s, did the same amount of sales in a year. The authorities closed both, as the enterprises did not meet the expectations of the regime in terms of their sales figures.
At present, searching for a Western investor does not look today as unrealistic as it used to as the survival of Belarusian machine building depends on whether or not it can find one. Peter Spuhler, owner of Swiss train car-maker Stadler Rail, is doing business in Belarus successfully and has had no issues with the authorities.
Belarusian companies should develop new markets outside of the former Soviet Union. This is hardly possible in the case of Western countries, but the focus should be on the developing world. Valiancin Lopan told Belarus Digest that machine builders should open offices in those countries with strong export potential and these offices should be run by the employee of the enterprises as usual dealers are bad at dealing with sales.
In the end, the Belarusian machinery industry can learn much from their successful colleagues. The Minsk Wheel Tractor Plant, maybe one of the most roboticised of enterprises in Belarus, entered the list of top 10 profitable enterprises recently. In December, its head Vitaly Vouk was promoted to the post of Minister of Industry of Belarus.
Belarusian machine building has a long history and great potential. The only question if there is enough will among the authorities to reform it.