Protectionism in EEU, New Ministry, Organised Crime – State Press Digest
In the first half of June, official newspapers in Belarus focused mostly on economic affairs.
Belarus-Russian cooperation within the Eurasian Economic Union continues to suffer from protectionism and exemptions in trade and prices, particularly in hydrocarbons.
Belarus will establish the Ministry of Antitrust Regulation and Trade to manage the growing liberalisation of the national economy. Belarus presents its armoured vehicle at the international arms exhibition.
Belarusian schoolchildren will be offered extracurricular programming courses, introduced to enhance national potential in the IT sector. Organised crime groups become more active as the region experiences instability. This and more in the new edition of State Press Digest.
Eurasian Economic Union suffers from protectionism. Minsk hosted the Third Forum of Belarusian and Russian Regions under the auspices of Aliaksandr Lukashenka and Vladimir Putin. As Belarus Segodnya noted, despite the social and humanitarian theme of the forum the presidents talked mostly about economic matters.
Lukashenka emphasised that the countries need to develop a single industrial policy and remove all barriers in bilateral trade; at the moment the EEU states often employ protectionism as anti-crisis strategy. In response Putin only answered that “Russia is interested in increasing food imports from Belarus”.
Russia is reluctant to cut gas price for Belarus. The newspaper Respublika criticises the Russian gas monopoly Gazprom for its persistent reluctance to reduce current gas prices. A previous attempt by Belarus to negotiate the issue with Gazprom at a recent EEU summit failed. Despite the common EEU market, trade within the union involves a number of exemptions.
Trade in hydrocarbons remains most sensitive for Belarus, which remains heavily dependent on Russian energy resources. The newspaper claims that in this way Gazprom is trying to raise funds for its major project – a gas pipe to China, as Europe increasingly diversifies its supplies to avoid dependence on Russia.
Belarus will establish a Ministry of Antitrust Regulation and Trade. The main reason for this change is liberalisation of economy, according to Minister of Trade Uladzimir Kaltovič, quoted in Zviazda. He specifically mentions the removal of price regulation implemented this January. As free competition on the market increases, the risk of emerging trusts grows.
The current governmental body in this area, as well as its policies, lags behind Belarus's partners in the Eurasian Economic Union. The Ministry will be restructured according to new functions, and local trade inspections will be united with antitrust agencies. Moreover, the Ministry plans to update and specify the antitrust law.
Switzerland will invest in Belarusian agriculture. Head of Hrodna region Uladzimir Kraŭcoŭ and Head of Embassy Subdivision of the Swiss Confederation in Minsk Pascal Aebischer met to discuss cooperation between the region and Switzerland, Hrodzienskaja Praŭda reports.
Swiss investors will allocate $4m to a farm with 12,000 pigs in Ščučyn district and $7m to a dairy farm in Smarhoń district. Pascal Ebischer has been visiting Belarusian regions this year to study their business potential. In an overview of bilateral cooperation, the diplomat mentioned that at the moment around 30 Swiss companies operate in Belarus, and trade turnover reached $3m in 2015. 20 Swiss citizens live in Belarus and a few hundred Belarusians study in Switzerland.
Belarus presents its own light-armoured vehicle V-1. Two Belarusian enterprises took part it the international exhibition of arms Eurosatory-2016 with 1,500 defenсe companies from 57 countries participating, writes Belarus Segodnia. For the first time, the Minsk Wheel Tractor Plant publicly presented a model of light-armoured vehicle V-1 (Volat).
It is designed for transportation of troops as well as fighting in urban and rural areas and mountainous and impassable territories. The manufacturers took into account the experience of recent local conflicts and anti-terrorist operations, where mines and improvised explosive devices posed particular danger. Therefore, V-1 is heavily mine-protected and has a V-shaped bottom which allows it to dissipate the energy of explosions.
Schoolchildren in Belarus will be offered extracurricular programming courses. In the new school year Belarusian schools will introduce Scratch – an object-oriented visual programming language, designed by Massachusetts Institute of Technology to teach children programming and algorithmic thinking. Schoolchildren will have the opportunity to study physics, mathematics, geography, biology, and even literature with the help of Scratch, writes Znamia Yunosti.
To date, Belarusians are learning the basics of programming later than their European peers, but now the situation is changing. The project will be jointly implemented by the Ministry of Education and High Technologies Park. Six IT companies have already tested it on their employees' children and achieved good results, the newspaper reports.
Helpline for children stopped work due to financial reasons. The national helpline for children and teenagers has not been operating for a few months now, Belarus Segodnia reports. In 2011 the international NGO ‘Understanding’ purchased equipment and established a helpline in the National Centre for Mental Health. The line received around 3,660 calls since its installation and succeeded in preventing 8 suicide attempts and dozens of violent acts annually.
The line stopped because of lack of funds to pay full-time staff, as the doctors of the Centre had to reply to calls during their working hours. The project needs $30,000 a year and ‘Understanding’ leader Andrej Machańko hopes that soon it will resume its work with the help of private charity donations.
Organised criminal groups become more active in environment of regional instability. Chief of the Department of Combating Organised Crime and Corruption of the Interior Ministry, Mikalaj Karpiankoŭ, revealed to Specnaz certain trends of organised crime development in the post-Soviet space and Belarus.
Organised criminal groups unite to become transnational, while professional thieves engage in business and some businessmen become closer to criminals. Some wealthy bosses use money and connexions to try to secure protection within the government. What's more, in recent years Russian gangs have become more active in attempts to increase influence on Belarusian criminal affairs. So far Belarus has been famous as a country with a highly repressive approach towards the so-called thieves in law – the higher strata of criminal bosses in the former USSR space.
The State Press Digest is based on review of state-controlled publications in Belarus. Freedom of the press in Belarus remains restricted and state media convey primarily the point of view of the Belarusian authorities. This review attempts to give the English-speaking audience a better understanding of how Belarusian state media shape public opinion in the country.
Renewable vs Nuclear: The Fate of Green Energy in Belarus
A large solar power plant will open this summer in the Brahin district, changing the landscape of the Chernobyl-contaminated lands: 85,000 solar panels will occupy an area the size of about 80 football fields.
Proponents of green energy praise it as a win-win solution: sustainable, ecological, economically profitable, and a diversifier of energy supplies in the country. The authorities publicly acknowledge the need to support the renewable energy sector, promising tax incentives and preferential treatment for investors.
However, most green energy projects in Belarus are in the shadow of the Astraviec nuclear power plant (NPP). In a few years, Astraviec will provide an effective and fast solution to Belarus' energy needs, further marginalising the renewable energy sector.
Farming the wind
Belarusian society has swallowed the nuclear power pill, despite the trauma of Chernobyl, since the state began marketing it as the single best way to secure the country's energy independence. However, the new nuclear power plant as an energy independence project does not eliminate Russian dominance in the Belarusian energy sector. Development of renewable energy in this respect looks more promising in terms of diversifying energy production.
Wind energy came to Belarus in 2000 with the construction of two wind turbines in Miadzel district. Currently, the largest Belarusian wind farm has only 11 wind turbines. It started operating in Navahrudak district in spring 2016. Each of the wind turbines has an average capacity of 1 MW – enough to supply energy to about 500 households.
The hilly landscape of the Navahrudak region makes it one of the most suitable areas in Belarus for the development of wind energy. According to estimates of energy sector specialists, renewable energy sources here have the potential to produce up to 24m kWh per year – enough to cover about 25 per cent of needs of the entire Navahrudak district.
Solar energy revitalising Chernobyl-affected areas
In recent years, cell phone operator Velcom invested €23m in the solar power plant project in Brahin district. The official power capacity of the station is 22.3 MW – enough to provide evening street illumination for the entire Belarusian capital.
Velcom spokesperson Helmut Duhs presented the solar plant project in Brahin as a green business product, noting that such projects create new jobs and benefit local economies. In this manner, they help to revitalise regions that suffered from the Chernobyl catastrophe.
The company plans to cover all expenses in four to five years, as Homiel region boasts about 1,900 sunny hours per year, more than any other part of Belarus. The land is also cheaper, as the Brahin district is not suitable for agriculture because of contamination from the Chernobyl fallout.
Yet in reality, Belarus has a long way to go, especially compared to Germany, which recently made the headlines around the world when it managed to obtain 100 per cent of its energy supply from renewable sources. By contrast, the share of renewable energy production in Belarus remains marginal, at around 1 per cent.
One step forward, two steps back
The law On Renewable Energy Sources, adopted in 2010, removed the state monopoly on energy production in Belarus. This opened the door for foreign investors, who are interested in renewable energy projects.
At first, the Belarusian state encouraged them. It guaranteed purchases of green energy, offering tax incentives and special tariffs for a 10 year period to allow investors to cover their expenses. The state also ensured that the price that ordinary Belarusians pay for energy from alternative sources remained on the same level as the price of energy from traditional sources.
Yet despite financial support from the EU and opportunities to attract investment from countries other than Russia, the Belarusian bureaucracy seems to acknowledge the potential of green energy only on paper, instead of genuinely committing to long-term sustainability goals.
The Belarusian authorities often fail to win the trust of foreign investors, refusing to remove bureaucratic hurdles or endangering projects already in their implementation stage, as happened in 2012 with the planned wind park near Minsk. German company Enertrag AG terminated the project after interference from the Belarusian Ministry of Defence, which complained that it was disrupting the radar work.
By 2015, the fortunes of green energy had changed dramatically. The state had the new NPP up its sleeve and tried to reassert its monopoly in the energy sector. The government promptly interfered with the introduction of quotas for green energy, limiting opportunities for investors.
In the period of 2016-2018, Belarus set construction limits for renewable energy sources to the overall capacity of 215 MW. One argument for this is reduction of costs, as currently the state pays 41 cents for 1 kWh for energy from renewable sources, when the cost price is only 9 cents. The state is also reluctant to pay this money to foreign companies, holding on to its monopoly of the Belarusian energy market.
What's in it for consumers?
Belarusian energy consumers have a chance to become energy-independent by investing in solar panel for their houses, but this decision is a risky one as the expenses remain high. The cheapest solar panels for private use cost up to $2,600. This amount exceeds average salaries in the country almost eightfold.
One of the principal risks is the issue of selling the excess energy to the state. In theory, the state has encouraged this by offering preferential tariffs since 2015. Yet in practice, this offer applies only to private companies and entrepreneurs, and not to ordinary citizens.
The larger problem is the grim perspectives of green energy since the emergence of the Astraviec NPP, scheduled for launch in 2018. It is quite possible that the state might change the rules of the game once again, revoking preferences to private sellers of green energy. Thus, the unpredictability of the regime creates similar risks for Belarusian consumers as it does for foreign investors.
In the long term and under favourable conditions green energy in Belarus could contribute to the energy independence of the country, as it has the potential to generate up to 25 per cent of the overall energy supply. Ideally, it also could help ordinary Belarusians to become self-sufficient in their energy production. Yet with the first Belarusian NPP in sight and without true commitment from the state, the future of green energy projects in Belarus remains uncertain.