Second Annual London Conference, growing Belarus-Russia tension, Bologna process – Ostrogorski Centre digest
The Ostrogorski Centre co-organised the Second Annual London Conference on Belarusian Studies in cooperation with University College London and the Belarusian Francis Skaryna Library and Museum.
In February, analysts of the Ostrogorski Centre discussed Russia’s attempts to destabilise the region around Belarus, the possibility of Moscow toppling Lukashenka, and the outcomes of Belarusian foreign policy in 2016.
The Centre has also released an analytical paper entitled ‘Challenges to Belarus joining the European Higher Education Area’, which resulted from the Fourth Annual Dutch-Belarusian-Polish Conference.
Second Annual London Conference on Belarusian Studies
On Saturday 25 February, the Second Annual London Conference on Belarusian Studies was organised by the Ostrogorski Centre in cooperation with University College London and the Belarusian Francis Skaryna Library and Museum.
Speakers from Belarus, the United Kingdom, Japan, Germany, the United States, and other countries presented and discussed Belarus-related research. The conference panels covered Francis Skaryna’s work and legacy, problems of Belarusian national identity, foreign policy of Belarus and comparative politics, social and political movements, and language and literature.
The main conference was followed by the Annual Lecture on Belarusian Studies, delivered by Dr Ales Susha, Deputy Director of the National Library of Belarus and Chairman of the International Association of Belarusian Language and Culture Specialists.
All conference presentations will be uploaded online in podcast form and selected papers from the conference will be published in the Journal of Belarusian Studies.
Siarhei Bohdan analyses Moscow’s actions to erect a border with Belarus and undermine its links with Ukraine and the Baltics. Russia accuses the West and its allies in the region of undermining links between Eastern European countries. However, its own policies pursue exactly the same aim. Minsk must fight hard to resist these efforts by the Kremlin.
Igar Gubarevich provides an overview of Belarusian diplomacy’s achievements and failures in 2016. In 2016, Belarusian diplomats succeeded in getting rid of most Western sanctions, improving the international legitimacy of the national parliament, regularising dialogue with Europe, and converting Poland from a strong critic into a reliable partner. Nevertheless, they failed to make Lukashenka fully presentable to his peers in Europe, alienated Ukraine’s political elite, botched export growth and diversification of the export market, and turned Lithuania from a supporter into a foe.
Ryhor Astapenia discusses whether scenarios in which the Kremlin attempts to topple Lukashenka are possible. Recently, rhetoric surrounding Russian-Belarusian relations has become so sharp that some journalists and analysts believe the Kremlin plans to overthrow Aliaksandr Lukashenka or occupy Belarus. However, off and on conflict remain a fixture of Belarusian-Russian relations. Despite belligerent grumbling, Lukashenka mostly upholds the Kremlin’s interests, promoting cooperation between the two countries.
Analytical paper: Challenges to Belarus joining the European Higher Education Area
The Ostrogorski Centre releases an analytical paper which resulted from the Fourth Annual Dutch-Belarusian-Polish Conference ‘Education as a Human Right: Modernising Higher Education to Meet the Challenges of the 21st Century’.
In 2015, Belarus joined the European Higher Education Area (EHEA) and committed to putting a Roadmap for higher education reform into effect by 2018. The implementation of the Roadmap is running behind schedule, which poses a threat to the fulfilment of Belarus’s obligations by the due date.
The paper released analyses of the main challenges to implementation of the Roadmap in Belarus; it also provides recommendations which could help to fulfil commitments on time and benefit a wider range of stakeholders.
- Read the full paper: Challenges to Belarus joining the European Higher Education Area
Comments in the media
On Polish radio, Siarhei Bohdan discusses the process of destabilisation around Belarus caused by Russian politics. Moscow has erected a border with Belarus where it never existed before, and tries to curtail Belarusian exports via Baltic ports. Russia accuses the EU of destabilising the region, but actively does so itself. Fragmentation of the region will lead to its impoverishment, Siarhei argues.
Alesia Rudnik discusses the recent political graffiti cases on Polish radio. Political graffiti can be seen as a new form of civic participation which attracts the attention of the public and the media, while the authorities see the phenomenon as a threat.
Ryhor Astapenia comments on the latest developments in Belarusian-Russian relations for the Polish news portal Wirtualna Polska. Contrary to the disinformation of some Russian media sources, Lukashenka does not intend to leave the Eurasian Economic Union and CSTO. However, this does not mean he wants to pursue further military or political integration. Instead, he focuses mostly on the economic aspect.
The website The Conflict Comment quotes Igar Gubarevich in an article about the Russia-Belarus energy dispute. According to Igar, both parties have leverage in this dispute and both are interested in finding an accommodating solution, as was the case on many other occasions. Belarus remains of strategic importance to Russia, both as a trading partner and as a demarcation line for NATO and the EU.
Vadzim Smok discusses whether Belarus stands a chance in a new oil war with Russia on Polish radio. Oil products remain Belarus’s No.1 export commodity, making up a third of Belarus’s export revenues. With no alternative options for hydrocarbon supplies and Minsk’s decreasing political and security leverage, the country will have to play by Moscow’s rules.
The British newspaper The Independent quotes Igar Gubarevich in an article about the legacy of the Chernobyl disaster. According to Igar, Belarus avoids drawing public attention to the legacy of Chernobyl for two main reasons. The image of a contaminated country might hamper its efforts to promote exports and attract foreign investment, and it may be at odds with the government’s newly adopted policy of pursuing nuclear energy by building the BelNPP.
The BelarusProfile.com database now includes the following people: Vitaŭt Rudnik, Alesia Rudnik, Andrej Paŭliučenka, Kaciaryna Siniuk, Anatoĺ Lappo, Dzmitryj Kaliečyc, Uladzimir Aŭhuscinski, Aliaksandr Center, Andrej Bryšcielieŭ, and Siarhiej Savicki.
We have also updated the profiles of Viktar Šynkievič, Siarhiej Pisaryk, Ihar Buzoŭski, Michail Žuraŭkoŭ, Lieanid Maĺcaŭ, Vasiĺ Žarko, Marat Afanaśjeŭ, Aliaksiej Pikulik, Uladzimir Tracciakoŭ, Ivan Dziemidovič, Ivan Žarski, Ihar Vojtaŭ, Aliaksandr Zabaroŭski, and Dzmitryj Kruty.
The Ostrogorski Centre continues to update its database of policy papers on BelarusPolicy.com. The papers of partner institutions added this month include:
Yaraslau Pryhodzich. The anatomy of Belarusian joint stock companies. BEROC, 2017.
Aliaksandr Autushka-Sikorski, Alena Artsiomenka. Work of the High Technology Park: a threefold increase in exports of IT services and what would happen if the park is closed. BISS, 2017.
Vadzim Smok. Challenges to Belarus joining the European Higher Education Area. Ostrogorski Centre, 2017.
Uladzimir Akulich, Yuliya Yafimenka, Uladzislau Ramaniuk, Katsiaryna Aleksiatovich, Viktoriya Smalenskaya, Ales Alachnovič, Sierž Naŭrodski. 8th issue of the Macroeconomic Review of Belarus (4th quarter 2016). CASE-Belarus, 2017.
Think tanks in Belarus are encouraged to submit their research for inclusion into the database by completing this form.
The Ostrogorski Centre is a private, non-profit organisation dedicated to analysis and policy advocacy on problems which Belarus faces in its transition to market economy and the rule of law. Its projects include Belarus Digest, the Journal of Belarusian Studies, BelarusPolicy.com, BelarusProfile.com and Ostro.by.
Consumption in stand-by mode, investments and trade – digest of the Belarusian economy
On 20 February 2017, Belstat, Belarus's official statistical agency, announced that the GDP has once again dropped by 0.5 per cent in January compared with the same month in 2016.
However, on 21 February 2017, Prime Minister of Belarus Alexey Kobyakov tried to mitigate the country's economic problems by claiming that Russia's oil cuts are the main cause of current economic woes.
Meanwhile, the real consequences of recession have led to a decrease in private consumption, lack of investments (especially foreign), and problems with trade diversification.
Consumption: a painful scenario
According to Belstat, in January 2017 the retail trade turnover in Belarus decreased by 4.6 per cent year on year, culminating in a record decline in private consumption over the past two years (see Figure 1). Experts attribute the fall in retail trade turnover with the economy's prolonged recession, which has in turn led to a reduction of the real monetary income of the population.
The Chairman of the Belarusian Union of Entrepreneurs, Alexander Kalinin, believes that this drop reflects a significant decline in the purchasing power of the population. Economist Yaroslav Romanchuk has explained the fall in income by the absence of efficient production and investments and a subsequent drop in sales, which has lowered wages.
As a result, the Swiss company Credit Suisse, in its global welfare report, placed Belarus in the group of poorest countries, with an income below $5,000 per person per year. However, it named the significant reduction of 'oil rent' as the main reason for Belarusians' increasing impoverishment. This, in turn, has been caused by the fall in oil prices worldwide and a reduction of oil supplies from Russia.
FDI: doubtful prospects
Meantime, the Belarusian authorities still consider China to be the country's main investment pillar in recent years, and try to encourage Beijing to participate more substantially in the privatisation of distressed industrial enterprises.
On 21 February 2017, First Deputy Chairman of the State Property Committee Alexey Vasilyev announced that China is considering investing in OJSCs such as Horizont, Vityaz, BATE, and Gomselmash as well as a total of 22 Belarusian state-owned enterprises (SOEs).
However, such prospects seem dubious, as, according to Alexey Vasilyev, the number of successful privatisation transactions in Belarus in 2016 was zero. This can be explained by the absence of privatisation proposals and hence a lack of interest from potential investors in the indebted enterprises offered.
State authorities have yet to draw up a list of profitable SOEs confirmed for compulsory privatisation. This process is still in its early stages, starting with a study of demand from potential investors. Additionally, the government is trying to find a way to improve the efficiency of management of state organisations by elaborating a new strategy for this purpose.
The new programme will define the principles of state policy in the field of SOE management, including the state's attitude towards state property. For example, the strategy will outline which enterprises are to remain the property of the republic and which are not, as well as what will happen to the stocks of privatised companies and the state's share in strategic enterprises.
A particularly interesting point concerns the proposition to sell up to 25 per cent of SOE shares on the stock market. The authorities think that the stock exchange could stir up the Belarusian market, which, in turn, could help them sell large blocks of shares at a higher price. However, these rushed attempts should have been completed twenty years ago.
Trade manoeuvres: lacking a long-term strategy
According to new data released by Belstat on 13 February 2017, the trade turnover between Belarus and Russia has dropped to its lowest point since 2009, when trade fell due to the global financial and economic crisis. Right now, the main cause lies in the unresolved oil and gas dispute between the two countries.
At the moment, it seems unlikely that Russia will agree to subsidise Belarus on previous terms. This is first and foremost because of its own economic problems (for example, growth of wage arrears, especially in the southern regions of the country), and secondly due to the need for economic reforms, which will consume additional financial resources.
As a result, revenues from petroleum product exports fell by 40 per cent in 2016 year on year. Export deliveries of Belarusian oil products have decreased in physical terms by 23 per cent and amounted to 13m tonnes (see Figure 2).
Additionally, the geographical structure has also changed, with Ukraine experiencing the largest increase – by one third, and the EU experiencing the largest decline – approximately by 33 per cent. Sales of the second most important Belarusian export, potash fertilisers, have also tumbled by 23 per cent compared to 2015.
Exports of agricultural and food products, Belarus's third most significant export item, have dropped as well. In previous year, exports came to $4.15bn, with almost 90 per cent going to Russia. However, due to constant bans from Rosselkhoznadzor, export growth of this trade item has not occurred either.
As a result, the authorities are trying to rectify two decades worth of one-sidedness in state external trade policy. However, the multi-vector trade policy remains mostly rhetorical. A recent example of this is the attempt to supposedly diversify imports of crude oil by trading with Iran. However, this is a questionable option for Belarusian refineries from a technological point of view.
Therefore, taken all together, the recession will make things difficult for Belarus. Economic hardships are being followed by decreased incomes, hesitant foreign investment, and badly implemented external trade policy.
Aleh Mazol, Belarusian Economic Research and Outreach Center (BEROC)
This article is a part of a joint project between Belarus Digest and Belarusian Economic Research and Outreach Center (BEROC)