Stripped of Cash, Belarus Grants Large Concession to British Company
Yesterday the Belarusian government concluded an investment agreement with the British company GMC Global Energy plc owned by Russian oligarch Mikhail Gutseriev. Gutseriev, who fled Russia in 2007 and currently lives in the United Kingdom, has undertaken to build a major potash-extraction enterprise in Belarus.
The new enterprise will inevitably compete with Belaruskali, the most profitable state company in Belarus. It will extract the same potassium and undermines all its further prospects. This desperate move by the Belarusian authorities is like shooting themselves in the foot. It shows that their options are really exhausted.
Earlier this month, Lukashenka issued a presidential order on concessions for natural resources. Belarusian potassium chloride has been the single major mineral exported of Belarus since Soviet times. Mikhail Gutseriev promises to invest USD 1.5 billion in three major sites to the south of the Belarusian capital. The new enterprise will reach its full capacity in ten years.
Allowing Gutseriev into such business is a very sensitive issue. Belarus has extracted potassium on its own for about 50 years, and has advanced technologies to do it, so it does not need foreign input. The potassium-extracting branch is controlled by state monopoly Belaruskali, which brings a bulk of income to the Belarusian budget; this year alone it will earn about USD 3 billion. Contrary to the government's boasting, it is potash products that are Belarus' major export commodity, and not cars or tractors. Another source of big money for the Belarusian government – oil refineries – are now suffering net losses because of the new price arrangements with Russia.
However effective its work may be, Belaruskali cannot expand its production despite increasing global demand. The government effectively confiscates all the profits leaving nothing for any major investment. In addition, no matter how much the Belaruskali earns, Lukashenka needs money now, and cannot wait.
In order to get the money, the Belarusian leadership grants – as always without any tenders or transparency – a concession to a good friend of the Minsk ruler who has already worked with the Belarusian regime in the past. In 2002-2002 he was the president of Russian-Belarus oil firm Slavneft. Apparently in today's Belarus, the only way to undertake major investment in the country is to befriend someone from the very top of the regime, and even better, Lukashenka himself.
Russian journalist Pavel Sheremet admits, “Of course, he [Gutseriev] does have money, but it is that type of entrepreneur and that type of investment which may be called risky. And this project is built upon a political component. None of the well-established Russian oligarchs will come to Belarus”*.
Having a powerful political sponsor is a precondition for doing business in Belarus. For example, after Lukashenka's visit to Qatar last August, the Belarusian government media loudly applauded the deals made which would allegedly bring billions to Belarus. The secret of such deals was simple – of course, the Qatari rulers can afford property in more legally-protected places in the West. Yet in Belarus they can build whatever they want even in places where the building is legally prohibited for some social, cultural or environmental reasons. What is impossible in Western countries is possible in Belarus.
For instance, some of the most discussed projects may be linked to building palaces in the world-renowned protected area of Belavezhskaya Pushcha. But there are no restrictive laws for Gutseriev and other friends of the Belarusian strongman. Upon signing the deal he gratefully declared that “the investment climate in Belarus is not worse than in other countries”*.
This new development demonstrates that the situation in Belarus is becoming desperate. Lukashenka would not touch potassium business had he not found himself in a real emergency. Could he put on sale other assets of his country? It is hard to answer this question, yet the value of many assets currently owned by the Belarusian state cannot be as high as expected.
The Belarusian government recently declared it was planning to get USD 6-7 billion of foreign investment for extracting national mineral resources. Yet this sum seems to be hardly achievable. Potassium was indeed sought by many companies and Belarus is actually a major player on the global market of this mineral resource. But other natural resources such as granite, gypsum or low-quality iron ore – that can be made available for some kind of foreign investment or purchase, are by far less profitable.
Most likely the king is effectively naked. Most business adventures of Lukashenka in the past – like the arms trade – were no more than improvisations to get quick money without any prospects for stable earnings.
One Political Prisoner Fewer – Civil Society and Politics Digest
On Sunday Belarusian authorities released yet another presidential candidate – Dzmitry Us. At least seven political prisoners remain in Belarusian prisons.
This number includes the two ex-presidential candidates Andrei Sannikov and Mikalai Statkevich, leader of the campaign “European Belarus” Dzmitry Bandarenka, Head of the Human Rights Centre “Viasna” Ales Byalyatsky, youth leaders Zmitser Dashkevich and Eduard Lobov and entrepreneur Mikalay Autukhovich. In addition, human rights defenders consider the case of five anarchists to be politically motivated; three of them are also in prison.
Trial of last defendant in mass riot case put off till 12 October. The trial of Sviataslau Baranovich, the last defendant in the “mass riot” criminal case, has been postponed until 12 October, after the judge ruled to call additional witnesses. The trial started on August 29. Baranovich is charged for participation in mass riots and may be sentenced to up to eight years in prison.
Human rights defenders congratulate Ales Byalyatsky. On 25 September, the friends and colleagues of Ales Byalyatsky staged a street event in Minsk Nezalezhnastsi Square to congratulate the imprisoned leader of Viasna on his 49th birthday. Human rights defender Uladizmir Labkovich was detained shortly after the picket and released after three hours without a report being drawn. In addition, nearly four thousand greeting cards for Ales Byalyatsky are the result of the "Solidarity with Belarus. Postcard to prisoner Ales Byalyatsky" campaign. The campaign in aid of Byalyatsky’s birthday (25 September) was held by Polish NGOs under the "Group abroad".
Ales Byalyatsky, Chairperson of the Human Rights Center Viasna and vice-President of the International Federation for Human Rights (FIDH), was detained on 4 August 2011. On 12 August he was charged with “concealment of profits on an especially large scale” and is now in custody in remand prison #1 in Valadarski Street in Minsk. He faces up to 7 years of imprisonment with confiscation of assets.
Andrzej Poczobut not allowed to leave Belarus. Such limitation has been imposed on the journalist of "Gazeta Wyborcza" by the criminal-executive inspection. The journalist has written about this in his Livejournal blog. Poczobut was sentenced to probation allegedly for slander against Alyaksandr Lukashenka.
Three arrested opposition activists are on hunger strike in Gomel. They are Andrus Tsianiuta, Kanstantsin Zhukouski and Zmitser Shauchenka. Shauchenka was arrested on 17 September for the dissemination of information about the upcoming "silent action". The court sentenced him to 15 days of detention. Tsianiuta was sentenced to 10 days of detention for the dissemination of information about the People's Assembly. Zhukouski was arrested just before the "silent action" on 21 September and sentenced to 15 days of detention despite the fact that his leg was broken during the arrest procedure.
Human rights activist Valyantsin Stefanovich returns to Belarus. On 30 September, he managed to get through the check-point at Minsk National Minsk without any problems. Stefanovich is accused of tax evasion, as is his colleague Ales Byalyatky.
One more member of the International Observation Mission banned from entering Belarus. On 30 September, a representative of the International Committee of the Observation Mission of International Control over the human rights situation in Belarus, the Ukrainian citizen Vladimir Senko was refused entry to Belarus. Vladimir Senko has already become the 12th representative of the Committee of the Observation Mission denied entry to Belarus because of his human rights activities.
The NGOs Assembly adopted two statements. The working group of the Assembly of Pro-Democratic NGOs of Belarus has adopted two statements concerning the possible dialogue between the authorities and society, and the prospects for EU-Belarus relations within the European Partnership program.
Essay contest on the rights of disabled. The Office on the Rights of the Disabled announced an essay contest and scientific papers on the topic "Accessibility and Disability", "Convention on the Rights of the Disabled". The competition aims to increase knowledge about the perspective of people with disabilities in Belarus; to promote the idea of equal participation; to develop expertise in human rights with a disability. Deadline for papers is 3 December, 2011.
BPPF announces the 9th call for proposals for small grants. Within the framework of its program on the systematic support for analysis in social, political and economic studies, Belarus Public Policy Fund (BPPF), in cooperation with Belarusian Institute for Strategic Studies (BISS), announced a call for proposals for small grants. Public policy-oriented research in Belarus is supported with the aim of invigorating and intensifying the debate on key public policy issues that are not satisfactorily researched by analysts and lack public discussion.
Week of Informal education. On 24 September – 2 October, The 6th Week of Informal Education was held in Belarus. This year the main topic of the Week was "Informal education and regional development". Seminars, trainings, round tables, and master classes were held in Minsk as well in the regions.
New non-profit Association. The Association of Professional Marketing has been registered in Belarus. The founders are seven Belarusian commercial companies, including: TUTby Media, Evrotorg, Centre of System Business Technologies Satio, Belbiz, etc. The aim of the association is to promote the professional community and education in the field of marketing in Belarus.
Increased inflow of foreign donations. Receipt of foreign donations by Belarus in the first half of 2011 increased to $47.6 million. This number is registered in the Department of Humanitarian Affairs. This is $8.1 million more than in the first half of 2010. Among leaders in obtaining foreign donations are NGOs – who received $17.1 million.
Belarus Digest prepared this overview on the basis of materials provided by Pact. This digest attempts to give a richer picture of the recent political and civil society events in Belarus. It often goes beyond the hot stories already available in English-language media.