Freedom day, escalation with Russia, and the ‘Ministry of Truth’ – Digest of Belarusian Analytics

Despite Lukashenka’s declarations on closer integration with Russia, long-term trends show that Belarus is gradually distancing itself from Russia. OSCE representative visits Minsk. Belarus seeks warmer relations with NATO.

Belarus’s self-awareness is on the rise. Belarusian authorities show tolerance to the Freedom day concert, yet demolish crosses at Kurapaty. Nobel Prize laureate Sviatlana Alexievich condemns the authorities over the Kurapaty crosses demolishing.

Russia will provide Belarus with a state loan of $600 million. Benefits for IT sector work grow, yet IMF and World Bank worsened Belarus GDP growth forecast for 2019.

Foreign Policy

Belarus: The State in the Middle – Gabriella Gricius, Global Security Review, argues how long Belarus can continue to balance between East and West. For two decades, Belarus has played a game of “Monkey in the Middle.” Amidst increasing tensions between Russia and the West, however, it remains to be seen how much longer it can continue to do so.

OSCE Special Representative: Fighting Against Fakes, One Cannot Create a “Ministry of Truth” – The OSCE Representative on Freedom of the Media, Harlem Désir visited Minsk on March 18-20 and met both state and independent media, as well as MFA and the Ministry of Information. In his interview to TUT.by, Harlem Désir tells if the OSCE can influence the Belarusian authorities and how to deal with fake news without restricting freedom of speech.

Belarus-Russia: Is a New Alliance Model Possible? – Dzianis Melyantsov and Yauheny Preiherman, the Minsk Dialogue expert initiative, do not believe that the recent Russo-Belarusian conflicts are just an ordinary allied routine. In fact, today Minsk and Moscow are arguing about the basics of their relationship: what format of the Union State, which this year marks its 20th anniversary should be.

Will Russia try to occupy Belarus? – Ryhor Astapenia, at The Washington Post, tells four things you need to know about the two nations’ falling out. In brief, a closer look at the evidence suggests that the chances of Putin governing Belarus are slim. While Alexander Lukashenka may publicly say that the two countries may integrate more, long-term trends show that Belarus is gradually distancing itself from Russia.

Security

Escalation After Tea. Why Minsk Noisily Quarreled With the Russian Ambassador – Artiom Shraibman, at Carnegie Moscow Center, assumes that heated rhetoric between the Russian ambassador and official Minsk is a symptom of deeper processes in the mutual relations. Both sides feel that they have come to some historical threshold. The old format of friendship has been exhausted so much that there is nothing to risk with.

Foreign Minister Makei Source: Belarus’s Foreign Ministry Press Service

Not an Enemy: Belarus Seeks Warmer Relations With NATO – Arseny Sivitsky observes that Belarus wants to expand constructive dialogue with NATO. However, further development of cooperation is limited by institutional and ideological constraints, which include the lack of necessary NATO framework agreements, false perceptions in the West of Belarus as a political-military appendage of Russia and concerns over the lack of progress in democratic reforms.

About the Information Security Concept of Belarus – Belarus Security Blog analyzes the Information Security Concept adopted in March 2019. In general, the concept itself is a positive trend in the work of the authorities in the information sphere, but it is aimed at ensuring the information security of the authorities, but not the people. Also, experts doubt that all the concept’s provisions will be fully implemented in practice.

National Identity

Freedom Day: Metamorphosis of Power and Opposition – Considering this year Freedom Day, Artiom Shraibman sees that the authorities and the opposition change their attitude to one of the main annual events of Belarusian politics. So, the authorities show their tolerance to concerts in authorized and fenced squares. The opposition has been divided into a “new” of young bloggers and activists, and a “political” of traditional opposition structures

Words Matter: Belarus’s Self-Awareness on the Rise Analyzing the recent exchange between Mikhail Babich, Russia’s ambassador to Minsk, and the Belarusian MFA, Grigory Ioffe believes that public remarks made in recent weeks have arguably contributed to Belarusians’ self-awareness and national consolidation at least as much, if not more than, all of the persistent political chatter of the last quarter century.

Sviatlana Alexievich: This is a Reference Point In Our History – Commenting the demolition of crosses in Kurapaty, Nobel laureate in literature Svetlana Alexievich admits that even she, accustomed to conflict with the authorities, was shocked. The writer is confident that even this case doesn’t lead to revolution and mass protest, there will be a notch in the mass memory about that day when the power has passed some new line.

Economy

Economic authorities propose changes in the stock and securities market to give a boost to regional development. The Finance Ministry proposes to abandon the preemptive right of executive committees to acquire shares, which has a restraining effect on investments in the regions. In addition, economic authorities envisage reducing the state’s share in joint-stock companies. 

Russia will provide Belarus with a state loan of $600 million. The funds will be used to refinance payments to repay the previous loans. By the end of April, Minsk can also receive the 7th tranche of $200 million from the Eurasian Foundation for Stabilization and Development (EFSD). The total EFSD loan of $2 billion is provided to support the reform program in Belarus.

Sviatlana Alexievich. Source: tut.by

Benefits for IT sector work. In 2018, the total tax payments of Hi-Tech Park’s companies and their employees have amounted to almost $280 million. This is $7 thousand per employee, which exceeds the tax payments of the average employee in the Belarusian economy almost 5 times. This is a finding of the review prepared by the IPM Research Center.

IMF and World Bank worsened Belarus GDP growth forecast for 2019. The International Monetary Fund (IMF) has revised downward its forecasts for the economic growth in Belarus in 2019 from 3.1% year-on-year to 1.8%. The World Bank also revised the nation’s GDP growth from 2.7% to 2.2% in 2019 and said that the economic growth would depend on the results of Minsk’s talks with Russia on compensation for the so-called ‘tax manoeuvre’ in the oil sector.

Other

Belarus criticized for poor anti-corruption standards. The Council of Europe, in an unprecedented move, has publicly declared Belarus’ failure in anti-corruption standards adopted in European countries. Twenty of 24 recommendations of the Council of Europe’s Group of States against Corruption (GRECO) “have remained outstanding”.

ICNL releases report on restrictions on higher education. The report seeks to understand the ways in which governments are repressing university autonomy and closing academic space. Belarus is mentioned in relation to forced membership in the government-controlled youth organization, the pressure on students for their socio-political activity, etc.

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.




Makei goes West, MILEX, and Chernobyl for tourists – State press digest

Alexander Lukashenka meets the President of Moldova, discusses Russia and Ukraine. Foreign Minister Makei flies to Geneva and later meets USAID representatives. Putin’s press-secretary Pescov rebuffs Lukashenka’s statements on the anti-Belarusian sanctions. Minsk prepares for the international military exhibition MILEX.

Belarus wants to expand its cooperation with the World Bank in projects worth $300m. Lukashenka disapproves the agrarian management, suggests that large industrial giants should take up more collective farms. Belarus intends to repair its parts of the “Druzhba” pipeline.

Lukashenka expects the High Tech park to bring the latest information technologies to the court halls. Minsk prepares for the Second European Games. The Belarusian authorities to open up the Chernobyl Exclusion zone for tourists.

Politics

The President of Moldova visits Belarus, reports BELTA. On 10 April 2019, Alexander Lukashenka met Igor Dodon, the President of Moldova, in Minsk. The presidents discussed the bilateral relationship, the Ukrainian events, and the relations of both states with Russia. According to Lukashenka, Belarusian-Moldovan relations remain almost flawless. Dodon, on the other hand, praised the Belarusian import to Moldova and expressed the intention to improve the mutual trade relations.

Foreign Minister Makei meets USAID representative, reports BELTA. On 11 April 2019, Uladzimir Makei met with a U.S. delegation led by Brock Bierman, Assistant Administrator for USAID’s Bureau for Europe and Eurasia. The parties discussed the bilateral relations and the potential enhancement of cooperation, particularly, in the areas of promotion of small and medium-sized entrepreneurship, tourism and culture.

In addition, previously Minister Makei visited Geneva to take part in the 68th session of the United Nations Economic Commission for Europe (UNECE), reported the Ministry of Foreign Affairs. Belarus’s foreign minister emphasized the unique role of UNECE as Europe’s top discussion platform on economic and social development matters.

Putin’s press secretary Peskov disagrees with Lukashenka’s statements on “the sanctions against Belarus”, reports “Soyuznoe Veche”. According to Dmitry Peskov, the temporary closure of the Russian market for several categories of the Belarus-made milk goods has never presumed anti-Belarusian sanctions. Peskov assured that Russia had always followed the political and economic agreements of the Union State and intended to do so in future.

Source: sb.by

Minsk prepares for the top military exhibition MILEX 2019, reports Belarus Segodnya. The Ninth international arms and military hardware expo MILEX 2019 will feature about 100 samples of weapons. Approximately 35 companies from Azerbaijan, Germany, China, and Russia have already confirmed their participation in the exhibition. The exhibition’s opening ceremony will take place at the historical complex Stalin’s Line on 15 May.

Economics

Belarus wants to engage in $300m projects sponsored by the World Bank, reports the Ministry of the Economy. In early April 2019, the Belarusian delegation led by the Minister of Economy Dzmitry Krutoy met with the World Bank’s Vice President for Europe and Central Asia Cyril Muller. The parties discussed the potential new projects in education, energy effectiveness, and infrastructure. Currently, Belarus’s investment portfolio reaches eight investment projects worth $790m.

Lukashenka angry with agricultural management reports Belarus Segodnya. On 9 April 2019, the President of Belarus went for a working trip to Lahoisk district. Alexander Lukashenka expressed particular dissatisfaction with the underperformance of the collective farms and state agricultural enterprises. The Belarusian leader encouraged the industry giants to take up more collective farms under their control:

I think some industry giants, like MTZ and Belorusneft, should take on more collective farms. They have people, some resources, technology and different approaches. They will be able to bring these companies into shape faster.

Belarus wants to repair its parts of the “Druzhba” pipeline, reports “Soyuznoe Veche”. According to the Vice Premier Minister Ihar Petryshenka, Belarus intends to repair all the pipelines passing through its territory. Due to the complicated nature of the maintenance works, several pipeline’s areas will close at times. By 2019, “Druzhba”, the world’s longest oil pipeline, flowing from the Yamal peninsula to Germany, will reach 55 years old.

Society

Lukashenka wants to introduce information technologies in Belarusian courts, reports BELTA. On 5 April 2019, Alexander Lukashenka ordered the government to improve the operation of the general jurisdiction courts by introducing the most advanced information technologies. According to the President of Belarus, the Belarusian judges need to stop using hardcopy protocols of court proceedings: “All the sessions of the Supreme Court should proceed without paper. You can use paper only if someone needs to take hardcopy notes in rare cases.”

Moreover, Lukashenka expressed the intention to digitalize the Belarusian courts all over the country by the specified deadline with the help from the HighTech Park and the Operations and Analysis Center.

Belarusian educators worried about plagiarism reports “Navuka” newspaper. According to Aliaksandr Huchok, the chair of Belarus’s Higher Attestation Commission, the Belarusian segment of the Internet contains 46 websites offering paid thesis writing. Though advertising such services break the Belarusian law, the Ministry of Education unable to trace all the lawbreakers.

Source: sb.by

The Belarusian language holds a positive therapeutic effect, reports Belarus Segodnya. According to Ala Ryzevich, a popular radio DJ from “Stalitsa” radio station, the Belarusian language helps to balance the daily stress and restore good psychological condition. Ms Ryzevich particularly advises using Belarusian words in conflict resolution.

Culture

Minsk hosts the Spring Queen 2019 beauty pageant, reports BELTA. On 8 April, the Minsk City staged the nationwide contest of beauty and talent Spring Queen 2019. Students from ten universities competed for the right to represent Minsk at the nationwide final show “Miss Belarus 2019”. Yelizaveta Abramkina, the student of Belarusian State Economic University, won the crown.

Belarus prepares for the Second European Games, reports “Soyuznoe Veche”. From 21 to 30 June 2019, Belarus’s capital will host more than 4000 sportsmen from 50 countries. The fox Lesik, the official symbol of the Games, became the first participant to register in the accreditation centre at the beginning of April.

Belarus to open the Exclusion zone near Chernobyl reports Belarus Segodnya. Tourists will get access to the abandoned villages; however, the tourist routes will retain safe radiation levels. The costs of such excursions should vary between $150-200.

The State Press Digest is based on the 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.




Conflict with Russia, the first crypto exchange in the world – digest of Belarusian analytics

Belarus finds itself in another conflict-in-progress with Russia, with a growing wave of Russian information attacks on Belarus. Belarus lifts restrictions on the number of US diplomats in Minsk, however, a breakthrough in Belarus-USA relations remains unlikely.

Belarus’s economic growth will slow down in 2019/2021. Belarus has got potential for reducing the generation of waste and expanding the substitution of primary resources with secondary raw materials.

World’s first crypto exchange launched in Belarus. Belarusian opened a hostel at the foot of a nuclear power plant. Belarus allows foreigners to register online. Minsk airport tops World’s Most Punctual Airports. To learn more visit cryptonews.com – Current Up to date crypto news.

This and more in the new digest of Belarusian analytics.

Politics

Belarus and Russia Dispute the Fundamentals of Their Relationship – Yauheni Preiherman notes that over the past several months, Belarus has found itself in yet another conflict-in-progress with Russia, with a growing wave of Russian information attacks on Belarus. The analyst believes that relations with Russia are absolutely crucial for Minsk and will remain so for a long time and under any government. But Belarus is not going to trade its sovereignty to preserve the status quo in relations.

Belarus – US: There Will Be No Breakthrough. Blitz Comment #1 – Andrei Kazakevich comments on a recent report on the lifting of restrictions on the number of US diplomats in Minsk. He believes that the full-fledged work of the embassy will expand the relations between countries but doesn’t mean qualitative changes. The Blitz-Comment is a new joint analytical project of BISS and Nashe Mnenie expert community.

Is Annexation of Belarus Really Imminent? – Belarus is not a former Soviet republic, Edward Lucas, a reputed British writer and security policy expert, stated in an interview with Belsat TV. He reduced the likelihood of a dramatic scenario in Belarus-Russia relations and noted positive changes in the country.

Belarus’s Foreign Minister Uladzimir Makei. Source: tut.by

Economics

Business self-regulation in Belarus: the case of advertising business – from declaration to implementation. Nikita Belyaev and Evgeny Mordosevich from Liberal Club research business self-regulation in Belarus on the case-study of the advertising business.  To ensure the promotion
of self-regulation in the Republic of Belarus as a whole, it is necessary to develop a form of incorporation for the self-regulatory organization.

Effectuation processes, gender, innovativeness and performance of SMEs: the case of Belarus. Maryia Akulava from BEROC explores the link between the applied effectuation principles, the gender of the leader and SMEs financial and innovative functioning on the Belarusian example. The findings also clearly indicate women being more prone to the hybrid decision-making strategy than men.

World Bank: Belarus’ economic growth will slow down in 2019/2021. According to the data in Global Economic Prospects report, the annual growth rate for Belarusian economy may slow down to 2.7% in 2019 and down to 2.5% in 2020/21. The lack of structural reforms may leave to increased political uncertainty.

Human rights

Authorities Performing Balancing Act Between Their Interests and Human Rights – Valyantsin Stefanovich, HRC Viasna, notes that the number of politically motivated criminal cases went down in 2018 but this may be due to the lack of important political events. This year, 18 people became the targets of politically motivated

UN: Prisoner executions in Belarus ‘simply unacceptable’. The continued use of the death penalty in Belarus has been condemned by an authoritative UN rights body after three men were reportedly executed there, despite its requests for clemency. Belarus remains the last country in Europe and Central Asia that applies the death penalty.

Sweep. Green Light for Some, Red Cards for Others – Yanina Melnikava, MediaKritika, overviews the rapid change of the Belarusian information space. The journalist points to the prosecution of the leading online resources, the introduction of mandatory user authorization, the emergence of Russian actors on the market that can result in serious consequences not only for the media sector but also for national security in general.

Security

Can Russia Devour Belarus? Really? – The conflict between Minsk and Moscow about the tax manoeuvre gives rise to fears that Russia is preparing to join Belarus. Several articles on this topic appeared in major Western media like The Washington PostBloombergIndependent. In the TUT.BY new video project Chewed, Artyom Shraibman convinces that it’s too early for supporters of Belarus’s independence to panic.

Belarus Inside the Bear Hug. And Its Geopolitical Predicament After the Ukraine Crisis – Aliaksei Kazharski, PONARS, in his policy memo notes that the 2014 crisis between Russia and Ukraine has produced new security concerns in Minsk related to a hypothetical Russian intervention and occupation of Belarus. But the crisis has also allowed Minsk to reap some short-term diplomatic benefits and improve its image in the West.

New Union State Military Doctrine Will Not Change Status Quo in Belarusian-Russian Military Alliance – Arseny Sivistky doesn’t believe that a new Military Doctrine of the Union State of Russia and Belarus will include provisions for the establishment of a Russian military base on Belarusian soil. But what is almost certain is that Minsk will seek to exercise its veto power to block the adoption of any political and military decisions inconsistent with its national interests.

Other

World’s first crypto exchange launched in Belarus. Currency.com platform allows traders to buy shares, gold, pink diamonds, foreign exchange and other traditional assets with cryptocurrencies from Belarus and other countries. The project was launched by two investment companies led by Viktor Prokopenya and Said Gutseriev.

Belarusian opened a hostel at the foot of a nuclear power plant. 18 km from Astravets town. The hostel is in demand among workers who are building the first Belarusian nuclear power plant. The hostel manager is confident that the place is safe, because “the degree of protection against radiation is very strong”.

Inside Minsk Airport. Source: airport.by

Belarus allows foreigners to register online. Foreigners arriving in Belarus can register online and free starting January 2, 2019. Thus, foreign visitors to Belarus are no longer obliged to visit registration offices in person. The registration of tourists can be done through the unified portal of e-services within 5 business days after arrival.

Minsk airport tops World’s Most Punctual Airports, according to Punctuality League for 2019. Minsk National Airport claimed the first place in the category of the best-performing small airports (2.5-5 million seats) with 92.35% of flights arrived or departed on time. ‘On-time’ is defined as departures and arrivals that take place strictly less than 15 minutes after schedule.

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.




Negotiating gas prices, Olympic failure, engaging the diaspora – state press digest

Belarus struggles to obtain favourable oil and gas prices and considers alternative suppliers, as it has in the past with Venezuela and Azerbaijan. Belarus will host a mission from the IAEA and hold stress tests to satisfy Lithuanian concerns regarding the safety of Astraviec NPP.

The Ministry of Foreign Affairs holds a consultative council of the Belarusian diaspora, trying to engage Belarusians living abroad in activity for the benefit of the Belarusian state. The government discusses the worst Olympic performance from Belarusian athletes in history and suggests ways to improve the situation.

This and more in the new edition of State Press Digest.

Politics

Belarus struggles to obtain favourable oil and gas prices. On 12 September Aliaksandr Lukashenka ordered negotiations for the supply of hydrocarbons from Russia to be finalised in two days, writes Belarus Segodnya. The two sides are now considering three approaches to pricing. The option most acceptable to Minsk supposes pricing equal to the European export price excluding duties and transportation expenses. The second option is the Russian domestic price under certain (unknown) conditions. The third is based on subsidising the Belarusian budget.

Lukashenka also required that the government works out alternative sources of hydrocarbon supplies, as Belarus has done in the past with Venezuela and Azerbaijan. According to Deputy Prime Minister Uladzimir Siamaška, the government already has ideas on that account.

Belarus will allow safety tests and foreign missions to inspect the nuclear power plant. A second round of the Belarusian-Lithuanian talks on the construction of the nuclear power plant has ended, reports Belarus Segodnya. Due to Lithuania's safety concerns, Belarus has requested that the IAEA carry out a special mission to evaluate the NPP construction site. Belarus will hold stress tests of the NPP in Astraviec. In addition to the mission, a European Commission delegation will visit the construction site.

Belarus will not stop construction of the plant, as there have been no violations of international or national standards. Therefore, Belarus's neighbours must be willing to compromise: as President Lukashenka has recently proposed, Lithuania could consider joint use of the nuclear power.

Olympic failure shows a need for a deep reform in sports. Belarusian athletes gave their worst performance in Belarusian Olympic history at the recent Games in Rio. Belarus Segodnya reports on a joint meeting between the Ministry of Sports and Tourism and the National Olympic Committee; the meeting's purpose was to understand the reasons behind this failure and suggest ways of improving. According to the head of the Belarusian Swimming Federation Anatoĺ Tozik, internal squabbles are largely to blame. Rather than than training their teams, managers and coaches fight for funds backstage.

One initiative suggested that funding be granted only for those sports which Belarusian athletes had performed well in before. Other sports would only receive funds for the development of youth teams. Remunerations for performances at World Cups and other intermediate starts would be downgraded, as this can discourage preparation for the Olympics. The system of stipends for coaches would be altered to put an end to certain kinds of abuses.

Ministry of Foreign Affairs gathers a consultative council of the Belarusian diaspora. 33 representatives of the Belarusian diaspora from 22 countries arrived in Belarus to participate in the consultative council on the Belarusian diaspora, reports Holas Radzimy. The council was founded in 2015 as a platform for cooperation between the authorities and Belarusians living abroad. Foreign Minister Uladzimir Makiej announced that the government has finally adopted a section entitled "Belarusians of the World" in the state programme for “Culture of Belarus in 2016-2020”. The programme offers financial support for the activities of Belarusian organisations abroad.

Makiej thanked those who promote the export of products manufactured in Belarus. "We plan to continue and expand the practise of inviting Belarusian businessmen from abroad to participate in various economic forums and trade fairs held in the country", the minister said.

Economy

Waste sorting plant is launched near Hrodna. The plant is capable of sorting 120,000 tonnes of waste annually, writes Hrodzienskaja Praŭda. In addition, 30,000 tonnes of separately collected waste will be collected from the city. The factory will employ about two hundred people, including chefs for maintenance of night shifts.

The plant was constructed by a Chinese company and funded by the World Bank. The World Bank also funds the second part of the project: the organisation of separately collected solid waste in Hrodna. This includes money for new types of containers and garbage trucks. Moreover, construction of the plant necessitates improvement of the solid waste collection system. The city will expand the existing container sites, build new ones and close garbage chutes in block houses during 2017.

Belarus-Finland economic forum took place in Homiel. A delegation of representatives of 40 Finnish companies headed by Finnish Deputy Secretary of State Matti Antonnen arrived in Homiel to participate in a bilateral economic forum. Currently 30 companies with Finnish capital operate in Belarus, writes Gomelskie Vedomosti. Over the last five years Finns have brought about $140m of direct investment to the Belarusian economy.

“One of the largest priorities in Finland today is clean energy and waste processing. We intend to explore this area in your country. In addition, we are interested in setting up joint ventures in areas such as agriculture and the IT sector”, said Chairman of the Board of the Belarusian-Finnish Chamber of Commerce Juha Hamalainen. An important factor for cooperation with Belarus is its membership in the Eurasian economic Union, which opens vast markets in Russia and Kazakhstan to investors.

Social

Student self-government in Belarus is effective. Znamya Yunosti gathers student representatives from leading Belarusian universities to discuss student-self-government in Belarus. The correspondent surveyed a few dozen students and none of them had heard of self-government at their Alma Mater.

However, representatives claim that they participate in all spheres of universities decision-making, including the educational process and curriculum, distribution of stipends and scientific activity. This happens through the Councils of Faculties and the general University Councils where they have seats.

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.




Nuclear Power Plant, Overdue Loans, Ease of Canadian Sanctions – Western Press Digest

Western media focused heavily this month on the current state of Belarus’ economy and financial market. In addition, the anticipated removal of Canadian sanctions might serve as a stepping-stone for other Western nations to re-evaluate their current sanctions against Belarus.

In other news: the construction of a new nuclear power plant in Belarus has caused controversy across the globe as we remember Chernobyl. U.N. human rights experts are also displeased with the recent execution of a prisoner, the results of Belarus’ Eurovision contender.

All of this and more in the newest edition of the Western Press Digest.

International relations

The Government of Canada is recognizing Belarus’ role – The Global Affairs Canada rewards Belarus for their facilitation of the Ukrainian ceasefire negotiations and peace agreement. This recognition will be seen through the removal of sanctions against Belarus, which have been in place since 2006.

In addition to Belarus’ assistance in the Ukrainian crisis, Canada is also recognizing the release of political prisoners and closer adherence to international regulations during the October 2015 presidential election.

Economy and business

Belarus’ potential bond deal will hopefully help the economyReuters reports on the potential sale of $ 1 billion of bonds at yields under 7 percent. As the result of economic decline in the last two years, Belarus is hopefully that a $ 3 billion support programme with the International Monetary Fund (IMF) will boost its economy. Currently, there is no anticipated timeline for an agreement with the IMF.

Impact of Russia’s recession and low commodity prices on Belarus’ economyThe World Bank has recently released an economic update report on Belarus which focuses on potential policy reforms that could help increase productivity and employment growth in Belarus.

Specifically, expansion into new markets coupled with the upgrade of internal goods produced will require state-owned enterprises (SOEs) to restructure. This restructuring will hopefully assist with a return of competitiveness in the market with the goal of reduced support from state subsidies. In addition, increased foreign investment through joint ventures and reforms will ultimately help foster growth.

Government spending cuts for June – The proposed cuts by Finance Minister Uladzimir Amaryn are anticipated for June of this year. Amarin wishes to cut government expenditures by 7-8%. The cutbacks are a result of revised budget calculations for oil barrel prices, as confirmed by Reuters.

The increase of overdue loans is placing strain on the Belarusian central bankBloomberg reports on the Belarusian central banks growing concern of increased pressure on the financial industry as a result of overdue loans. The bank has tried to stabilize the financial system through controlling the money supply in addition to relaxing the exchange rate. The ultimate goal is to restore the general populations’ trust in the Belarusian Ruble.

Security and Defence

Belarusian Parliament introduced a new military doctrineDefenseNews discusses Belarus’ new military doctrine, which prohibits the Belarusian military from engaging in foreign operations. Armenia has criticised the passing of this doctrine as it challenges the obligations set forth by the Collective Security Treaty Organisation (CSTO) established in 1992. Armenia’s concerns come as a result of renewed conflict in Nagorno-Karabakh. The resurgence of military activity between Armenian and Azerbaijani forces has undoubtedly caused Armenia to re-validate current security agreements to ensure allied support.

Civil society and culture

Anti-government opposition calls on Belarus’ prosecutor to ban the Russian biker club Night Wolves – The Belarusian People’s Front party is advocating the ban of the pro-Putin Russian biker club Night Wolves. The club has been accused of extremist behavior resulting in the Polish Government denying them access to journey through Poland for their yearly recreation of the Soviet Red Army’s march towards Berlin in WWII.

The journey through Belarus is an integral part of the Night Wolves’ recreation of the Soviet march. The club had not seen any resistance from Belarusian authorities until the request was issued by the People’s Front as reported by Newsweek.

Belarusian charged with fighting alongside Ukrainian extremistsRadio Free Europe/Radio Liberty confirms the sentencing of Taras Avatarau to five years in prison following a Minsk district court ruling. The accused stood trial for assisting the Ukrainian extremist group the Right Sector through trafficking weapons and other explosive materials. In addition to trafficking, Avatarau was cited as engaging in combat against Russian separatists in Ukraine’s regions of Donetsk and Lukansk. The Right Sector has been labeled and banned in Russia as a terrorist organization.

Belarus execution criticised by U.N. rights expert – The Associated Press reports on the reaction from U.N. human right experts about an execution of a suspected murder in Belarus. The execution of Sergey Ivanov on 18th April, has re-surfaced discussions around Belarus and continued human rights violations. The victim’s brother had appealed to the committee on the grounds that Sergey’s trail was unfair. This event serves as a reminder that Belarus remains the only country in Europe that continues to apply the death penalty.

Belarusian Eurovision entry Ivan has been criticisedThe Telegraph reports on Eurovision’s contestant Ivan for his desire to perform on stage naked while accompanied by two live wolves. Ivan’s vision for his onstage performance was a clear violation of Eurovision’s staging rules. Ivan’s last competition was held on 12th May for the second Semi-Final. Ukrainian singer Jamala won Eurovision on 14th May.

The construction of a new Belarusian nuclear power plant – The BBC examines the construction of a new nuclear power plant in Belarus near the town of Ostrovets in the Hrodna Voblast. The construction is reminding the world of the events that transpired in Chernobyl in 1986. The Government of Lithuania is interpreting the construction of Ostrovets, which is roughly 50km from Vilnius, as a security threat. The BBC outlines the design of the plant in the April version of BBC Magazine.

An international criminal conspiracy – The Pittsburg Post-Gazette discusses the usage of computer malware the arrest of two citizens of Belarus in Westmoreland County, Pennsylvania. The suspects, Aleskey Yaroshevich and Egor Pavlenko were arrested by the FBI as part of an initiative to halt the theft of money through the distribution of malware software on the Internet.

Aaron Ostrovsky

Aaron is an intern at the Ostrogorski Centre




Economic and Financial Reforms, Defensive Military Strategy – Western Press Digest

Belarus's economy continues to shrink, and the government tries to sell proposed reforms for financial support from international organisations. Meanwhile, the IMF notices "considerable progress" in discussing reforms and the World Bank puts forward its vision of the reforms that are necessary to restore growth in Belarus.

Belarus continues to boost its military potential by modernising old weapons while acquiring new ones, but its strategy will remain exclusively defensive. Minsk celebrates the anniversary of the 1917 Bolshevik revolution and commemorates Czech Jews killed by the Nazis in 1945. All of this and more in the new edition of the Western Press Digest.

Russia’s financial crisis has started to impact Belarus’ economic growth. According to the Financial Times, due to falling level of Russian imports, Belarus’ GDP will most likely shrink to 4% in 2015. Additionally, the Belarusian ruble has decreased by nearly 50% in dollar terms. Any remaining foreign investment has nearly evaporated as a result of the economic downturn. Aliaksandr Čubryk, Director of the IPM Research Centre, remarked that, “the story of this economy is the story of inefficient state-owned enterprises.”

The Finance Ministry and the Central Bank are working with international financial institutions to roll out reforms with the hope of securing financial support from the International Monetary Fund. On 9 November an IMF delegation visited Belarus to discuss a new facility that has an estimated worth of between $2 and $3 billion dollars. The government, in addition, wishes to distribute a Eurobond next year worth €1 billion.

The International Monetary Fund released a statement on the current mission in Belarus – On 20 November the IMF visited Minsk. The purpose of the mission, led by Peter Dohlman, was to evaluate recent economic developments and to begin discussing a new economic program that would potentially receive financial assistance from the IMF. Mr. Dohlman observed that, “the staff team and the Belarusian authorities made considerable progress in discussing a set of policies which could be supported by a three-year Extended Fund Facility (EFF) arrangement.”

World Bank discusses restoring economic growth in Belarus through sequenced reforms – Belarus’ economy, according to the World Bank, requires institutional changes that assist in fostering enterprise performance, innovation, and the diversification and establishment of new markets for Belarusian products. Such reforms include managerial incentives, job skills development and overall improvement in Belarus’ business climate. Weak foreign and domestic demand will cause the economy to contract by 3.5% in 2015 and by 0.5% in 2016.

Mr. Young Chul Kim, the World Bank’s country manager for Belarus, stated that, “The purpose of a comprehensive reform is to remove structural constraints which have prevented the Belarusian economy from realising its maximum potential.” In addition to sequenced reforms, potential membership accession into the World Trade Organisation (WTO) could help stimulate substantial income growth.

Fitch rating for the Belarusian National Reinsurance Organisation (Belarus Re) Insurer Financial Strength (IFS) received a B minus – Belarus Re functions as the national monopoly reinsurer. This monopoly has grown to 100% in 2014 from 10% in 2006. The rating received is a reflection of 100% state ownership of Belarus Re. Although there is no direct agreement between the company and the government, various capital injections at its inception have occurred over the recent years.

In Fitch’s view Belarus Re’s investment portfolio is of lower quality due to the constraints of sovereign risk, the presence of issuer concentration and the quality of local investment instruments. Belarus Re’s has limited options to diversify due to a limited investment market and strict insurer’s investment policy regulation.

Belarus military strategy is exclusively defensive Polish Rzeczpospolita quotes Lukashenka, as he visited the military industry plant in Dziaržynsk district. Belarus will cause unrecoverable loss to those who dare to attack it, and the development of rocket forces is a major goal in this strategy, Lukashenka said. Belarus has been boosting its military potential in recent months, receiving four Jak-130 jets. By 2020 it will have replaced its MiG-29 with Su-30SM jets and have purchased new Jak-152 training planes from Russia. Also, Belarus will receive four surface-to-air missile systems, the S-300, and it is currently in negotiations with Russia to acquire the more modern S-400 systems.

In 2015 Belarus strongman Lukashenka repeatedly said that his country will not give any land to an aggressor. According to him, Belarus became one of the most militarily powerful counties in Eastern Europe after the considerable modernisation of existing forces and the development of its own weapons.

Minsk celebrates the anniversary of the 1917 Bolshevik Revolution – In celebration of the anniversary of the 1917 Bolshevik Revolution a new Soviet-themed shopping mall has been opened in Minsk. The Leningrad Mall, a four-floor glass building, is decorated with Soviet memorabilia and propaganda paraphernalia. The shopping centre is a growing reminder of Lukashenka’s Soviet nostalgia and ritualistic opening of shops and centres during the anniversary of the Bolshevik Revolution.

Unveiling of a memorial for Czech Jews killed in Belarus – Radio Free Europe/Radio Liberty covered the ceremonial unveiling of a memorial for 6,000 Czech Jews who were deported from Czechoslovakia and then killed in Minsk in 1945. The ceremony was held on 23 November on the 70th anniversary of the first groups deportation from Czechoslovakia to Belarus. The Minsk Educational Centre of Johannes Rau established the memorial. Milan Ekert, the Czech Ambassador to Belarus, was in attendance.

Man is sentenced to death in Belarus – On 20 November a Hrodna court in western Belarus found Ivan Kulish guilty of murdering three female salesclerks during two separate store robberies. Mr. Kulish has been sentenced to death. Belarus remains the only country in Europe that still utilises capital punishment. Since Belarus’ independence in 1991, roughly 400 felons have been sentenced to death.

Aaron Ostrovsky




Who Funds the Opposition, EU Neighbourhood Barometer – Digest of Belarusian Analytics

Belarusian analysts remain sceptical about integration within the post-Soviet space. BISS invites discussion on its new social contracts research results. The Centre for European Transformation presents the results of the "EU-Neighbourhood Barometer" on the attitudes of Belarusians towards their own country and the European Union.  

The Eastern European Studies Centre examines the third sector in Belarus. The World Bank approved a new programme for Belarus for the coming years. What does the Partnership Strategy mean for Belarusians?

Lyabedzka: My Party does not Receive a Penny from the West – one of the most discussed issues of the week was articulated by Anatol Lyabedzka, UCP leader, at the recent EuroNest meeting in Brussels. In particular, Lyabedzka suggested checking the assistance that democratic countries provide for civil society in Belarus.

The politician explained his sudden suggestion that there are in existence some pseudo-democratic organisations which are supported alongside together with truly independent media, human rights activists and political structures. Euroradio spoke to the politician about his statement, which risks causing a new round of arguments in the democratic community.

EU Neighbourhood Barometer: What Belarusians think about Belarus and the EU? – Alyona Zuikova, from the Centre for European Transformation, prepared a paper analysing the results of the research component of the Regional Programme for EU communication. EU Neighbourhood Barometer gives a snapshot of the whole region, making it possible to compare the Belarusians public opinion on issues related to democracy, democratisation and Europeanization, with the opinion of the residents of other EaP countries. In particular, Belarusians have expressed a moderate position on most issues, while avoiding radical ones.

Eurasian Economic Union: A new Toy for the Three – The future of the Eurasian Economic Union, which Belarus, Russia and Kazakhstan are to create by 2015, analysts say, is rather lacklustre. They believe that by 2015, all the integration documents will be signed and ratified by the three countries, but the real integration will be visible later. This was discussed in a regular issue of the Amplituda TV TUT.by program, attended by experts Alexei Pikulik, BISS Academic Director, and Yuri Shevtsov, director of the Centre for European Integration.

BISS-Timeline #5 (May 2013) – The Belarusian Institute for Strategic Studies (BISS) issued its regular monthly review of the major social, economical, political and cultural events in Belarus. The May issue covers US and EU sanctions' being lifted against Belarusian companies, a meeting of the Supreme Eurasian Economic Council, the opposition’s initiative to hold a ‘popular referendum’, some signs of liberalisation in the cultural landscape, etc.

The Bell, No.4 (34) – The Eastern Europe Studies Centre (EESC) presents an issue of the electronic newsletter The Bell is devoted to the analysis of the NGO sector in Belarus. In particular, Tatsiana Chulitskaya examines the current situation of the NGO sector in Belarus and stresses upon the main strengths and weaknesses of it; Yury Chavusau gives a brief review of Belarusian NGOs registered abroad and categorises them into four different types.

Presidential Election 2015: Opposition is Still Off – Belaruskaya Delovaya Gazeta noted that in 2015 the 5th presidential election will take place in Belarus, and respectively asks a number of experts whether the opponents of Lukashenka have a chance to update the Belarusian political Olympus. The experts – Andrei Egorov, Alexander Shpakovski, Valery Karablevich – were all practically on the same page and do not see strong candidates in the Belarusian opposition. "A crisis of age and cadres affects the fact that elections can go almost unopposed," stated  Shpakovski.

The European Endowment for Democracy HQ opened. On 27 May the headquarters of the European Endowment for Democracy (EED) were opened in Brussels. The Endowment is expected to provide assistance to civil society organisations, young pro-democracy leaders, and independent media outlets. The Endowment will be financed by the European Commission funds and EU member states. Over the first three years, the EED budget will reportedly exceed €25 million.

The organisers of cultural events will have to get concert licences. The presidential decree of 5 June provides for compulsory obtaining of a certificate for an organisation to conduct cultural and entertainment events in Belarus (concert licence) at the Department of ideological work. Independent artists believed that such a decision could be caused by the desire of the authorities to have additional control over this realm.

World Bank approves new Partnership Strategy for Belarus. Accepted on 6 June, the new Country Partnership Strategy for Belarus for 2014-2017 is based on consultations at all levels of society, and with development partners. It commits to help reforms in key areas needed for the country to regain competitiveness, but also to maintain macroeconomic stability and sustainable growth.

The State of the World's Children 2013. On 30 May UNICEF issued its annual report on the issues of children with disabilities. The report urges the governments of all countries to sign, ratify and implement the Convention on the Rights of Persons with Disabilities. To the moment, 128 countries, including the EU, have signed the Convention; Belarus is not in the list.

Poland invites Belarusians to a new scholarship program. Polish MFA in cooperation with the Ministry of Science and Higher Education launched the Stefan Banach scholarship program designed for students studying economics, engineering, natural and agricultural sciences, or European studies and living in the EaP countries. Any Belrusian can participate at the new Program, regardless of his/her political views.

Belarusians earned abroad nearly a billion dollars. In 2012, Belarusian citizens received from abroad 913.1 million dollars of personal transfers, states the Belarus National Bank. Thus, the official earnings of Belarusians abroad have increased by 15.2% in comparison with 2011.

Belarus becomes world's top country for SPAM. Belarus has eclipsed the US to become the biggest single source of global spam, according to cloud-based email and web security firm AppRiver. After the spike happened on 13 April, AppRiver said it began recording an average of 12.3 million spam messages per day from Belarus – which is now climbing.

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.




Belarus and China in the Love Triangle: Who is the Third Party?

Recently, Belarus was frequented by Chinese matchmakers. To have a look at the bride with his own eyes, last month the president of Belarus went on a date with his new beloved in her own territory. In the middle of October, Alyaksandr Lukashenka paid a visit to the People's Republic of China.

Behaving as proper fiancé, Belarus' leader announced that he has observed China for a long time and admired the scale and the uniqueness of its projects which demonstrate Chinese dynamism to the rest of the world. Belarusians, according to Lukashenka, rejoice in Chinese successes and celebrate them as their own. If Belarusian leader really has been observing China for years, why has the need for China in Belarus appeared just now? Was it the Belarusian leader who suddently realized the he needed China or was it China that realized it missed Belarus a lot?

Actually, as in every chic love affair, there is a third party involved — it is the behavior of Western donors that has provoked Belarusian-Chinese love affair. Looking too far eastward, we have forgotten the Western donors, who have been providing Belarus with development aid for years.  Giving very modest assistance and imposing sanctions, the West pushed Belarus to change its borrowing preferences in favor of China.

The main western donor — the third party in this love affair — is the World Bank, which is represented by the International Bank of Reconstruction and Development (IBRD) in Belarus.  Shortly after the country proclaimed independence the IBDR has been providing the country with constant, though varying in intensity and volume, assistance. However, this Belarusian bride-to-be, which put herself back on the map on the eve of the latest presidential elections, appeared to be not as caring as the Chinese competitor.

Speaking the language of numbers, Chinese export agencies in Belarus promised a credit line of $15 billion on the eve of the presidential elections in 2010. Chinese export credit agencies debuted on the Belarusian scene relatively recently —  in 2009.  China inspires other countries not because of Maoism or colonialism, but largely because of policies developed by the US and Western Europe.

Export credit agencies are neither new institutions nor were they invented in China. Actually, the first export credit agency was created in order to deal with the post-revolution Russia back in 1919, when the political climate was full of risks. In order to maintain exports to Russia the British firms started up export credit agencies. Since then export credit agencies have been established in almost all high- and middle-income countries.

One could argue that comparing China's loans and IBRD assistance is like comparing apples to bicycles. However, this is not the case. Official Development Assistance (ODA), like that provided by the IBRD, consists of loans, grants and/or technical assistance on concessional financial terms. This aid aims to reduce poverty and promote economic development in developing countries. Officially, lending through export credit agencies — with the pure purpose of export promotion — is excluded.

However, the “purity” of export promotion can be difficult to measure. For instance, developed countries which belong to the OECD are constantly criticized of subsidizing its export credits with the ODA. Therefore, China's behaviour does not differ greatly from the one of developed countries. However, unlike the OECD, Bejing calls things by their true name.

Thus not only developed countries offer export loans. Emerging economies are becoming new active actors in this market.  For instance, China increased its exports of capital three times during the period of 2000-2005.  The trend of the last decade suggests that some emerging countries became important suppliers of official export loans. This is why export loans fall under the definition of development assistance in the Belarusian case.

Mainly due to a relatively large amount of Chinese export loans, the Development Assistance Committee’s (DAC) bilateral donors and partners are excluded from the recent love affair. In 2005-2009, Germany, Sweden, and the USA were the largest bilateral Western donors in Belarus, with the total amount of assistance of  $85 million, $145 million, and $62 million respectively.

Another institution, the European Bank of Reconstruction and Development (EBRD), is not involved in the love story either. The EBRD only offers symbolic funding to Belarus. However, just before the last presidential elections Belarus got additional $50 million from EBRD and the largest grant/loan from the IBRD in the whole history of cooperation for $255.6 million. This state of affairs proves the “bandwagon” effect in aid allocation: when a recipient receives more aid from one donor this may attract more funds from other donors. However, the amount of Western development aid is still incomparably low compared to Chinese export loan proposals.

The IBRD’s loans and grants introduce less visible changes in the country than Chinese export credits. Thus, a paradox lies in the fact that selfishness of bilateral ambitions of China as a donor positively affects development of Belarus. Whereas, "fairness" of the Western assistance seems to push off the development.

The situation around China’s and the IBRD’s assistance looks like a downward spiral or a vicious circle of aid. Until Belarus gets on the path of democratization, it should not expect increase in aid from the Western donors. At the same time  in theory the more aid country gets, the more aid is on offer and vice versa.

Unable to get money from the West, Belarus begins to cooperate with Chinese donors which do not pay any attention to the regime type, and the regime is getting stronger because of Beijing’s funds. Since Western donors do not look like they are mobilizing themselves to provide Belarus with more development aid, for now, we should expect the Belarusian-Chinese love relationship to flourish.

Palina Prysmakova




Where is Belarus in International Rankings?

Below is an overview of position of Belarus in various international rankings. The overview suggests that although human potential of the country is relatively good, the country has serious problems with freedom. As a result, the realization of this potential is blocked.

Freedom Freedom House measures freedom in its annual publication "Freedom in the World 2009", which includes review of political and civil liberties in the world in 193 countries. Belarus is in the category of “not free” countries. In the category of "political rights" Belarus ranked the worst with 7 points, in the category "civil liberties" – 6 points. Overall assessment of democratic freedoms in some other countries included in the study of "Freedom House": Czech Republic (2,18), Estonia (1.93), Lithuania (2,29), Moldova (5,07), Poland (2,25 ), Ukraine (4,39).

Economic Freedom Heritage Foundation and the The Wall Street Journal – overview of economic freedom in the world in 179 countries. As a result of 2009 Belarus received an overall assessment of 48.7 points and occupies the 150-th place. Among the worst post-Soviet countries behind Belarus are Uzbekistan (158), Ukraine (162) and Turkmenistan (171). The highest index of economic freedom in Europe is Ireland (81,3), which occupies the 5th place in the ranking. At the bottom of the ranking are Cuba, Zimbabwe and North Korea.

Press Freedom "Freedom House", Press Freedom Index of 195 countries in 2009: Belarus -188 (188) place (not free press) Russia – 174 (170), place (not free press) Ukraine – 55 (110) location (partially free press) Poland – 24 (51) location (free press) Latvia – 23 (40) location (free press) Lithuania – 18 (25) location (free press). (In parenthesis – ranking in 2008) Reporters Without Borders, press freedom ranking of 175 countries in 2009: Belarus – 151 (154) Russia – 153 (141) Ukraine – 87 (89) Lithuania – 10 (16) Latvia – 13 (7) Poland – 37 (47) Ukraine -89 (87) (In parenthesis – ranking in 2008)

Internet Freedom CryptoHippie monitors Internet freedom in 52 countries. Belarus – the third worst country in terms of Internet control. China is on the first worst country, North Korea – the second, and Russia – the fourth.

Peacefulness Institute for Economics and Peace, an analytical center of the journal Economist, Global Peace Index 2009 in 144 countries. Analysis to 23 indicators measuring the level of military expenditure and respect of human rights. Belarus – 98 place Poland – 32 place Lithuania – 43 place Latvia – 54 place Ukraine – 82 place Russia – 136 place

Human Development The United Nations Development Program ranks countries according using Human Development Index. Belarus is ranked in the category of "High Human Development" and occupies 68th position out of 182. This index takes into account statistics for life expectancy, education, and GDP. Norway has the highest Human Development Index and Niger the lowest.

Approval of the Country's Leadership Gallup organization assesses approval of the country's leadership. Here is their percentages of people who approve their leadership. Belarus – 46% Russia – 56% Ukraine – 4% Corruption Transparency International evaluates perception of corruption (according to expert estimates) in 180 countries. Belarus is ranked 139th.

Prosperity Legatum is a British think tank which assesses the world wealth in 104 countries. According to the ranking of Global Prosperity Index: Belarus – 85 place Poland – 29 place Latvia – 32 place Ukraine – 61 place Russia – 69 place

Sovereign Credit Rating For the first time in its history, Belarus received its credit rating in 2007. Then it was defined as stable. Sovereign credit rating is considered by foreign investors as an assessment of investing in economy of a particular state. On 1 July 2009, international rating agency Standard & Poor's announced sovereign credit rating of Belarus: long-and short-term rating on liabilities in foreign currency (B + / B) and long-term and short-term ratings of obligations in local currency (BB / B). The future outlook of the country is negative.

Doing Business According to the 2009 Doing Business report published by the World Bank, Belarus occupies 58th place (out of 183). According to the ranking, it very easy to start a business but extremely difficult to pay taxes.

YK




Is Ukraine More Repressed than Belarus?

According to Heritage Foundation, a US conservative think tank, Belarus has more freedom than Ukraine. Belarus is ranked as 150 out of 179 countries in the Index of Economic Freedom. According to the report, business, trade and fiscal freedoms as well as government spending has improved in Belarus. However, the situation with corruption in Belarus has deteriorated.

It is not surprising that Belarus ranked low in the Heritage Foundation’s list. It is very surprising that the “last dictatorship in Europe” has more freedom than Ukraine. Both countries are classified as “repressed”. Belarus, that for the first time in many years has been ranked as not most repressed country in Europe Although some may see it as a sign of real improvements in Belarus, the methodology of such ranking is very questionable.

Granted, recently Belarus has undertaken a few steps to liberalize the economy, but still it has by far less freedom than Ukraine. Unlike Belarus, Ukraine has been recognized as a market economy both by the European Union and the United States, and it is likely to be a member of the World Trade Organization soon. Although on the corruption issue Ukraine may indeed have more problems than Belarus, the share of private sector in the Ukrainian economy there is much greater than in Belarus, where the Belarusian state controls most of the economy.

According to the Heritage Foundation, the main advantage of Belarus comparing to Ukraine is Business Freedom (72.1 points for Belarus vs. 38.7 pts for Ukraine). In the absence of empirical studies of their own, the Heritage Foundation seems to rely heavily on the World Bank’s Doing Business report.

That Index of Economic Freedom similarly ranks Belarus higher than Ukraine for ease of doing business. Echoing the Doing Business report, the Heritage Foundation notes that now it takes less time in Belarus to start a new business or obtain a license. However, It is hardly possible to believe that Belarus has more economic freedom than Ukraine. Apparently, in the absence of independent legislature, it was easy for the Belarus government to fix the laws, so that they conform to several indicators to which the Doing Business report authors pay attention. It takes longer in Ukraine to fix the laws, because unlike Belarus, it has democratically elected parliament and presidency which reflect diverse interests of Ukrainian voters.

Another significant advantage of Belarus according to the Heritage is labour freedom (84.4 pts vs. Ukraine’s 57.7 pts): Reportedly, Belarus has “relatively flexible labor market regulations” that “promote more job creation and productivity growth. The non-salary cost of employing a worker remains high, but dismissing a redundant employee is relatively easy.

The so-called Labour Freedom is exactly the problem, which prompted introduction of the European Union economic sanctions against Belarus in 2006. In fact, employees in Belarus are stripped of virtually all protections available in other European countries, including the right to organize in trade unions. Once they concluded a labour contract, they not even terminate terminate it before it expires. On the other hand, the Belarusian State, which is the largest indirect employer is Belarus, can indeed fire anybody with ease, because there are almost no labour law protections apply.

Despite its questionable ranking methodology, the general description of the Belarus economy given by the Index of Economic Freedom is fair:

Belarus’s economic freedom score is 48.7, making its economy the 150th freest in the 2010 Index. The persistence of Soviet-era policies and practices continues to deny Belarus the benefits of economic freedom enjoyed in most other former Soviet republics, although its low score has improved by 3.7 points after four years of decline.

Reforms undertaken to reduce regulatory costs and enhance the business and investment climate have led to improved business freedom and labor freedom scores. Most of Belarus’s 10 economic freedom scores, however, are considerably lower than world averages.

In reality, Belarus’s economy is still characterized by pervasive state involvement and control. Restructuring is very slow, and the small private sector remains marginalized. Though tax rates are moderate, there is no comprehensive tax code. Regulations are confusing and applied unevenly. The government controls many financial institutions, directly or partially and subsidizes inefficient state enterprises. The court system is completely dependant on the State and the state almost never looses to private parties.

Read the full text at heritage.org.

YK & AČ




The IMF Asks the Belarus Government to Weaken its Grip over the Economy

WASHINGTON – Having concluded another round of consultations with Belarus authorities, the International Monetary Fund urges the Government to sell state assets, curb lending and raise utility prices to cope with the most serious economic crises in more than a decade.

The IMF recommendations sharply contrast with the views of Sergey Tkachev, one of Belarus President’s most influential economic aides. In an interview given earlier this week, privatization of state property is described as a “craze” and the movement towards economic liberalization as shameful. (The full text of Tkachev’s interview as well as a compilation of its most controversial parts are available online in Russian.)

However, privatization and liberalization is exactly what the IMF expects from Minsk. Here is the Concluding Statement of the IMF Mission to Belarus:

Belarus is confronted with the urgent task of overcoming the current economic crisis and longer-term challenge of resuming rapid economic growth. To improve the external current account balance and preserve reserves, the authorities need to maintain a tight macroeconomic policy stance and contain domestic demand. The measures that are needed to achieve this will be an important subject for discussion during the mission’s continuing work on the second review of the SBA. The Article IV consultation discussions have focused on the longer-term issue of how Belarus can resume the growth performance of recent years. The mission believes that high and sustainable growth in future can be achieved with improvements in productivity and increased foreign direct investment. Economic liberalization and accelerated privatization efforts can produce these results. The exchange rate level and regime appear appropriate, but a move to a more flexible system would be warranted once a strong institutional framework is in place to support it.

1. Belarus achieved an average 7.5 percent annual growth in the ten years up to 2008, benefiting from its inherent strengths and favorable external conditions. High investment-to-GDP ratios and productivity gains from a well-educated and disciplined labor force were the main contributors to growth. The favorable external environment—including strong growth in Russia and the rest of the world, easy access to the Russian market, and low-cost energy imports from Russia—also allowed the economy to grow rapidly.

2. However, the global economic crisis has exposed the economy’s vulnerability. The external current account has registered a sizable deficit for most of the past decade as savings fell short of investment, leading to precariously low international reserves. Concentrated exports, destined mainly to the Western European market for oil products and the Russian market for non-energy products, were hard hit when demand in both markets fell drastically as a result of the global financial crisis. The situation was exacerbated by reduced subsidies on energy imports.

3. Belarus has made progress in economic adjustment in 2009, which will help restore the country’s external stability. The 20 percent devaluation of the rubel against the U.S. dollar and the adoption of the peg to a basket of currencies in early 2009 helped improve Belarus’s external competitiveness. The authorities’ willingness to widen the band in June and to allow flexibility of the exchange rate within the trading band has made the system better positioned to absorb further external shocks. Disciplined wage policy has also contributed to restoring external competitiveness, and future wage increases should be consistent with maintaining external competitiveness.

4. Nevertheless, boosting domestic demand when the country’s balance of payments remains fragile would risk undermining the objective of reducing external vulnerability through building international reserves. Credit to the economy continued to grow strongly in the first seven months of 2009, driven by lending under government programs, often at subsidized rates. In addition to crowding out normal commercial credit and imposing fiscal costs, the lending programs boosted domestic demand, which increased the trade deficit and has led to loss of reserves in recent weeks. These lending programs need to be curtailed and the resulting changes reflected in the government programs under which they take place, to alleviate reserve losses.

5. The authorities’ commitment to a balanced budget in 2009 has been an important source of strength for the economic program. To realize this target, the government needs to closely monitor the collection of revenue in an environment of lower income, profits, consumption, and trade activity. It would be advisable to defer a public wage increase, while providing targeted social assistance to shield the poorest from the impact of the crisis. It is also important to keep the deficit of the local governments under control.

6. A prudent fiscal position in 2010 is necessary to consolidate macroeconomic stability Tax reforms envisaged in 2009, which would help reduce distortions in the system, need to be followed through. In the meantime, utility tariffs should be raised toward cost recovery level, and social assistance reform completed.

7. The NBRB needs to tighten credit policy in the near term. Given the already high level of interest rates, strict limits should be set on lending under government programs. This would not only reduce import demand but also contribute to more effective risk management in banks. It will also be important to strengthen the operational independence of the NBRB through legislative changes which would facilitate monetary policy implementation and effective banking supervision. Any easing of the policy stance should be conditional on continued decline in inflation and recovery in reserves.

8. While the banking sector is less susceptible to global deleveraging, it remains vulnerable to a rise in non-performing loans (NPLs) and domestic liquidity risk. The NBRB should continue monitoring the asset quality and liquidity situation closely, and enforce prudential regulations.

9. Increasing the commercial orientation of the banking sector would be essential to improve risk management and reduce banks’ vulnerabilities. Transferring existing bank loans under government programs to the proposed Financial Development Agency would help clean up the banks’ balance sheets. The agency should take over existing government-directed loans and associated state funding from commercial banks, and could eventually become the exclusive source of funding for government programs, with its lending financed from the budget and banks disengaged from such lending. At the same time, efforts should be made to strengthen governance of the state-owned banks and prepare them for privatization.

10. Looking ahead, the economy is expected to grow at lower rates than recently registered for the foreseeable future in the context of a weak global recovery. GDP is expected to contract this year, largely because of spillovers from the deep recessions in Russia and the European Union. In 2010, benefiting from a gradually recovering global economy, output is expected to register a modest rebound.

11. In the longer run, several external constraints may hinder a return to the growth path prior to the current crisis. Both the GDP level and potential growth rate of Belarus’s main trading partners are likely to be lower in the aftermath of the crisis, reducing external demand for Belarus’s products. Easy access to the Russian market is no longer guaranteed. Belarus would not benefit to the same extent as in the past from preferential prices on oil and gas imports from Russia. This would have significant costs for Belarus.

12. Domestic factors could also hold back the country’s potential growth. Domestic savings have been lower than investment, putting pressures on an investment-driven growth model as external financing is likely to be less accessible and more costly following the global crisis. In addition, there are indications that the returns from investment have declined, not only because the level of investment is already very high, but also much of the recent investment has been in residential construction. Like some other countries with aging populations, the labor force is likely to shrink reflecting demographic trends. Due to these factors, long-term potential growth in Belarus could be 2-3 percent lower than the pace observed in the past decade.

13. To repeat the remarkable growth performance of recent years, it would be essential for Belarus to strengthen its growth factors by carrying out structural reforms. Significant productivity gains would be necessary to resume high economic growth given the limited scope to increase capital and labor input from domestic sources. In this respect, the emphasis on public expenditure on education should be maintained. Experience in other countries that have undergone economic transition proves that better allocation of resources, a larger and more dynamic private sector, and increased use of foreign capital can help boost productivity growth. Belarus has much to gain from market-oriented reforms given the fact that Belarus is still in its early stage of transition, and its structural reforms can focus on yielding state control to market forces, and steadfastly pushing ahead with privatization.

14. To allow market forces to play a major role in the allocation of resources, state intervention in the economy should be significantly reduced.

• Price controls need to be reduced to the minimum so that the price signal can direct the flow of resources and help adjust excesses and shortages in the economy, and most retail trade margins should be abolished in line with the government’s agreement with the World Bank;

• Wages need to be liberalized to reward high productivity, and the labor market developed so that workers can move to jobs where they are most productive;

• Mandatory quantitative targets at the macroeconomic and enterprise levels need to be abolished as it has become more difficult to manage an increasingly sophisticated economy through central planning; and

• The banking system shall be allowed to make lending decisions based on the profitability and risks of the projects rather than government directions or recommendations.

15. Productivity growth will also benefit tremendously from the emergence of a strong private sector.

• Conditions for setting up new private businesses should be simplified, as experience in other countries indicates that jobs created by the private sector can provide employment opportunities for workers laid off as a result of state enterprise reforms. New businesses might be created by spinning off parts of existing state enterprises.

• The regulatory burden on the private sector should be further reduced, and greater flexibility in setting prices, wages and margins allowed.

• The expansion of the private sector would benefit from financial sector reforms that help increase the private sector’s access to credit resources;

• These benefits can be amplified by the participation of foreign investors.

• An ambitious and transparent privatization agenda that is open to foreign investors would help bring capital, technology, and management and marketing skills. This, combined with a high-quality and better motivated labor force, holds the promise of greatly increasing total factor productivity. Foreign investment can also help diversify Belarus’s production base and export market, and spread good business practices to the rest of the economy;

• To attract investors, both foreign and domestic, conditions attached to new investment, including the requirement to keep the current employees and wage scale should be reduced;

• Learning from other countries’ experience, the renewed drive can start with the enactment of a modern Privatization Law and establishment of a Privatization Agency charged with preparing enterprises for privatization, with the power to hire professionals from the market to support the process. Privatizing a few enterprises through an open, transparent, and competitive tender early next year would help demonstrate the government’s commitment and help build capacity.

16. Providing social security can help reduce the negative impact of, and sustain popular support for the structural reforms. A social safety net can be established to give subsistence and vocational assistance to the temporary dislocated labor force, until they are re-absorbed by the labor market. Privatization proceeds and fiscal savings from reduced subsidies to inefficient production can help finance the safety net.

17. The exchange rate level and regime appear appropriate, but a move to a more flexible system would eventually be warranted. At present, the current peg to a basket of currencies with flexibility around a central parity offers the best prospect of maintaining external stability. Over time, and when a supporting institutional framework is in place, Belarus can move further in the direction of exchange rate flexibility. A flexible exchange rate regime would better enable Belarus to handle the real sector shocks to which it is subject. It would require an alternative nominal anchor (such as an inflation targeting framework) and an independent central bank capable of implementing credible monetary policy.

Source: the IMF web site.




Looking for ‘happiness on a different part of the planet’

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“[N]o one nation can meet the challenges of the 21st century on its own,” acknowledged the president of the United States Barack Obama in his speech to Chinese officials today. Uncharacteristically, his Belarusian counterpart seems to agree, at least in principle.

Despite its advantageous geopolitical location between the West and Russia, Belarus resigned itself to political isolation in the late 1990s. However, the change is in the air. Hockey ace Alyaksandr Lukashenka has started aiming at a different net and hopes to join the rest of Eastern European team in cooperating with the West. The Belarusian President has even promised to restore mutual diplomatic presence with the United States, if Washington lifts economic sanctions.

The leader hurried to explain that his civilized tone with the West is not a result of some “bargaining, over-compromising or PR.” Indeed, it would be hard to reach a compromise with President Lukashenka. However, Lukashenka has implemented a few liberal reforms, released most of political prisoners, and markedly loosened control of the economy. To be sure, Lukashenka clarified that Belarus “has its own way forwards” and will not develop “according to one stereotype, to somebody’s dictation.” In presidential lingo, this probably means that Lukashenka’s authoritarian leadership style and human rights violations will continue. After all, in his view, “Belarus doesn’t have less democracy than its neighbors.”

 

In return to Lukashenka’s overtures to the West, the EU lifted the travel ban on the President and his retinue last fall. This May, Belarus – along with other five former Soviet republics – was invited to participate in the Eastern Partnership, a project intended to foster closer economic and political ties with the EU. Moreover, Minsk has collected a $1.5 billion from the International Monetary Fund and is waiting for another $1.36 billion from the IMF and $200 million from the World Bank.

Since Lukashenka’s gaze turned westward, the “union state” with Moscow has become “a neverending construction project.” Increasingly more “controversial matters” are emerging “in relations with brotherly Russia,” as the Belarusian President noted. On July 22, Belarus urged its citizens to obey Georgian laws when traveling to Abkhazia and South Ossetia. While Russian Deputy Foreign Minister Grigory Karasin called Lukashenka’s move “bizarre,” his behavior is actually becoming more predictable as it now corresponds to a broader trend exhibited by leaders of most post-Soviet states, including Ukraine and Georgia. Russia’s economy is sinking, and it is smarter to sail away and look for happiness on a different part of the planet, as Lukashenka himself aptly noted in May. Had it not been for Moscow’s generous gas subsidies and the need to sell Belarusian goods on the Russian markets, the Belarusian-Russian symbiosis would have ended even sooner.

“It’s a very difficult thing to deal with, loss of empire,” US Vice President Joe Biden noted in the interview at the end of a four-day trip to Ukraine and Georgia. His ‘condolences’ have come at the right time. Russia’s influence in Near Abroad has weakened as the country struggles domestically. On the one hand, giving (subsidizing) is no longer tenable in the dire economic situation; on the other, strong-arming its neighbors now brings too little bang for the buck. In fact, flexing its muscles in the Near Abroad has only backfired. The EU was spurred to start a new pipeline through Turkey and southern Europe to bypass mercurial Moscow. The United States neither canceled its missile defense plans in Europe nor backed down from supporting Georgia and Ukraine. Even Belarus failed to follow the suit of Nicaragua by recognizing the breakaway Georgian provinces.

Losing an empire is tough indeed. How is the empire’s backyard braving such a ‘loss’? Those less fortunate in the Russian orbit have to endure Moscow’s tightened grip. Thousands of Russian troops are stationed in Abkhazia and South Ossetia, and Ukraine’s gas flow was shut twice in the last three years, but neither Tbilisi nor Kiev returned under the Russian wing. The grip on other former Russian satellites – especially on the few acolytes that stayed loyal after the Soviet implosion – has actually loosened. Belarus belongs to the latter.

However, President Lukashenka admitted to still feeling “a threat of graceless great power statehood” as Russia froze its $500-million loan in May and announced construction of a new pipeline to cut off Belarus from its oil supply route to Europe in June. The rules are being redrawn, and although it is unlikely that Belarus-Russia brotherhood will end for good, the Belarusian foreign policy is clearly becoming more balanced.

Read more on the subject in Wall Street Journal, “Biden Says Weakened Russia Will Bend to U.S.




Barely Solvent but Ready to Gamble

0000e117President Alyaksandr Lukashenka’s playing Moscow against the West is turning a profit in the midst of global economic crisis. Having received $1.5 billion from Russia and $1.5 billion from the International Monetary Fund, Belarus will soon close its financial gap for the current year. Pending are a further $1.36 billion from the IMF, $200 million from the World Bank and $500 million (the last tranche of a $2 billion credit) from Russia.

Although the demand for its goods from Russia and Europe plummeted, Belarus is faring quite well in crisis. Less dependent on external financing, its financial and banking sectors won’t take long to recover. Minsk is even confident enough to seek accession to the WTO, as a participant in a customs block with Russia and Kazakhstan. While becoming a WTO member is a long shot for the country with an old Soviet-style economy and a foreign trade turnover of modest $50 billion, the whole gambit will certainly boost Minsk’s ego and attract Western investors.

 

The European Bank for Reconstruction and Development has approved a 10-fold increase in the amount of foreign trade that Belgazprombank can finance, raising its maximum exposure from $1 million to $10 million. Belarusian national airline Belavia has brushed up on entrepreneurial skills and is launching a frequent flyer program. Things are looking up, and even Campbell’s is ready to soup up its business by making a foray into the Belarusian market.

The financial crisis, however painful, may help Belarus shed the remnants of its Soviet past. Although the country’s economy is still largely owned by the state, the government vowed to implement modest privatization plans at the end of the economic slump, selling off some of its companies into private hands. Foreign investors in Russia, Turkey, and Austria have already purchased several banks and two telecom firms.

Minsk expects to service its external debt – too low to negatively affect the Belarusian economy, as the country’s analysts boast, – in 2009 and 2010. Belarus’ surly neighbor to the East begs to differ, however. Predicting that Belarus will go bankrupt as early as next year, Russia is slow to send the last installment of its $2 billion credit to Belarus. But if Moscow’s tranche falls through, President Lukashenka will have a chance to flaunt his “heroic” resistance to the Kremlin’s pressure to recognize Abkhazia and South Ossetia.

Moreover, if Russia zips up its wallet, Belarus will find other ways to profit from Moscow’s proximity. Having successfully gambled politics for many years, Lukashenka now plans to accommodate Russia’s casinos displaced by Vladimir Putin’s new law in July. Boosted by the flood of Russian gambling giants, Belarusian gambling industry may grow into a substantial source of income as Lukashenka promised to make the country’s gambling laws “the best in the world.”




Jonathan Moore’s interview to Charter97

Jonathan MooreThe United States chargé d’affaires in Belarus Jonathan Moore recently gave an interview to Charter97. Below is the full text of the interview:

– Mr. Moore, an alarming tendency has appeared recently: some European politicians openly flirt with the dictatorship in Belarus. Despite of the gross violations of human rights, new political prisoners in Belarusian prisons, crackdown on peaceful rallies, they speak about some “liberalization” in Belarus. What would the policy of the new US administration be, enticement of dictatorships or support and encouragement of democracy?

– Thank you for your question, and I appreciate the opportunity to talk with you today. I would describe the situation in different terms. Over the past year we have seen a variety of developments in Belarus. Some developments have been positive, others have not been. To go back to last August, the release of the last political prisoners was a positive step.

We were told that conditions would be much improved for the parliamentary elections. However, those of us who observed those elections and certainly OSCE report which was very comprehensive and professional, now that the election did not turned out as promised.

There have been protests which have occurred without any interference by the police. There have been some events that were allowed to occur, such as the congress of the Belarusian Christian Democracy Party, and the Union of Poles; the distribution of Nasha Niva and Narodnaya Volya, and some steps to establish a broader dialogue with civil society.

At the same time, and we will be talking about it in the interview, there are some cases that are of concern to us.

In terms of Europe’s position, of course Europe has many positions. There are 27 different member states that have 27 different opinions. I think it’s important however to stress that both the US and the European Union have the same fundamental perspective towards Belarus. This is underlined by the fact that both the United States and the European Union recently took steps to prolong the suspension of some sanctions. But it also indicates that neither the European Union nor the US are in a position to be able to remove sanctions. The government in Washington made a decision to keep an Embassy here, to maintain a dialogue with civil society and the authorities. And that is an approach that the Obama Administration is continuing to follow.

We have made clear that we are prepared to take positive steps to encourage positive steps on the side of the Belarusian authorities.

We certainly have a very active dialogue with civil society. We appreciate the support of many people in Belarus to us through our diplomatic difficulties. But at the same time we are here to maintain dialogue with the authorities as well.

– Isn’t there a confusion of terms when you speak about positive steps and you mean positive steps that are not substantial? Small steps like the congress of the Belarusian Christian Democracy or the two newspapers that are now distributed in kiosks (but their distribution is very small, 300-400 copies for Minsk, which is next to nothing) have almost no influence on the situation in the country. And the West is underlining and stressing that “liberalization” is taking place, taking minor steps and insignificant changes as examples which do not influence the situation in Belarus. Meanwhile, new political prisoners appeared in Belarus, and serious violations are going on and remain unnoticed.

– I did not use the word “liberalization”. As we look at the situation, we look at smaller steps and at larger ones. We have many serious concerns and we’ve made that clear to the authorities. And we can talk about these cases in more detail, but we do not currently consider that there are political prisoners in Belarus. But I think the fact that U.S. sanctions have not been removed indicates that the United States is by no means satisfied that all the work is done in Belarus.

– Over the past month human rights violations have taken place in Belarus: leaders of entrepreneurs Mikalay Autukhovich, Yury Lyavonau, Uladzimir Asipenka, Young Front activist Artsyom Dubski were imprisoned. Peaceful rallies on St Valentine’s Day and on Freedom Day were disbanded brutally. Youth leaders are forcibly drafted despite of their poor state of health. Why there is still no official reaction of the United States to these events?

– Let’s talk about these issues separately. Certainly it is very much our belief that protests and meetings should be allowed to take place without interference from the police. Examples like the protests after the elections in September or protests of entrepreneurs in January showed that it’s certainly possible to have events and protests take place without police involvement. As far as I know (your information may be more up to date) the small protest that was held last night with regard to the Day of Remembrance, was not particularly marked by any action by the police.

– But it only confirms that when the regime does not stage provocations, policemen do not beat up people, opposition can hold peaceful protest rallies.

– In that context it should have been possible in February for the police to have not gotten involved.

With regard to the case against three entrepreneurs, we are following it very closely. Two of them are former political prisoners. They are in custody. However, the court proceedings have not begun. We have expressed interest in seeing the evidence in the case and have not had the opportunity to do so. And therefore it would be premature for us to come to conclusions in that case.

Similarly, in the case of Artsyom Dubski, we were present at his last trial. And if there is another trial we will be observing that as well. We are following these issues carefully, but we do not feel it would be appropriate to characterize them specifically at this time.

– The US imposed sanctions after the denial of Belarusian authorities to release political prisoners. When political prisoners were released, sanctions against two enterprises were lifted. Should these 4 people are detained, recognized as political prisoners by the United States and the EU, would the United States be fighting for their release as for the previous ones?

– I don’t want to speculate at this time. There have been cases where people have asked questions about the motivations for the trials, but people had been found innocent, or they’ve been only sentenced to a fine. We’ll have to deal with each situation as it develops. It is our hope that more positive developments will occur, which will allow us to suspend more sanctions.

– Belarusian human rights activists state there are hidden repressions in the country today. The regime has become more cunning. There are different concealed forms, for example, setting up criminal cases, falsified criminal cases against leaders, pressure like drafting youth leaders and pressure with the help of tax inspection. For a person from the West it is hard to realize what is going on here. Is there any hope that the international community will follow and be attentive to such cases?

– I think we have open eyes: it’s one of the reasons why we have an embassy here. As diplomats we are trained in observing these sorts of issues and situations all around the world. Like her predecessors, Secretary Clinton has been very clear: human rights are important for the United States.

We look at a host of factors and developments on many levels. And we also look at civil society very closely to understand what the policies are, what the motives of different organizations are. And certainly by paying that kind of attention, when we feel it’s appropriate for us to act or speak out we will do that.

– The ideals of freedom and democracy have always been precious for the US. The US stated it is necessary to promote these ideals all over the world. In most cases your country was adhering to principles when dealing with dictatorships. What is your attitude to the fact that Lukashenka’s Belarus is becoming a part of the Eastern Partnership alongside with democratic Ukraine and Georgia, and to the invitation of the Belarusian dictator to the EU summit in Prague?

– We view the Eastern Partnership as a very important initiative. It is of course the initiative of the European Union. The United States does not have a role in it. It already includes a number of countries; in addition to those you’ve mentioned, Moldova, Armenia and Azerbaijan. And those countries are at different levels of political and economic development.

The EU is now discussing of course how they wish to approach the issue of invitations to the summit in Prague. There are good reasons for ensuring that Belarus is included, that Belarus is not excluded from a group of the countries in this region. It would be wrong to exclude a sovereign, independent country like Belarus from a regional gathering like this. It is a very active debate, and how the Europeans will decide is their business.

– But fundamentally not the Belarusian nation is in question, but legalization of the regime called “the last dictatorship of Europe” by the US Department of State.

– The United States and many European countries maintain embassies and diplomatic relations with Belarus. I think we’ve been clear about our perspectives on the situation in Belarus. But even in 2006 the United States sent an ambassador here who presented her credentials to Alexander Lukashenka. I attend events at the state level, where he is also present.

European ambassadors here also presented credentials to Lukashenka. So this is not a case of Cuba where we do not have diplomatic relations, or Iran, where we have no embassy, no diplomats at all. So I don’t think that’s the critical issue for the Europeans.

– But Belarus’ becoming a member of the Eastern Partnership program would allow Lukashenka to say Europe recognizes him. He will ask for more loans to support his regime. Do you agree that dictatorship’s becoming a part of the European Partnership is more serious than giving credentials?

– Honestly, I do not see it that way. Solana was just here, Ferrero-Waldner wanted to come here and expected to see him. I think that indicated that Europe at a very senior level is prepared to engage directly with Alexander Lukashenka. And as I’ve said the invitation to the summit depends on the European Union. I think the different sides will make their own statements and competent conclusions about who gets invited and how it would be handled.

– What are the possibilities of making decision on tighter sanctions against Belarus by the US should the human rights situation deteriorates further in Belarus?

– We are following the situation in Belarus, as we discussed earlier, very closely and with great interest. We recognize that we introduced comprehensive sanctions in 2007 against Belneftekhim and its subsidiaries. I can’t promise what decisions would be made in Washington. I do not want to eliminate any possible future decisions of this president or the next American president. I can tell you however in the current discussions we are not talking about adding to the sanctions, we are talking about taking away some of the sanctions.

We feel that it would be better to be in a situation where we would be suspending and in fact lifting our sanctions. We track the situation; we do take note of some steps that have occurred. The government in Washington will be reviewing the situation again at some meetings in May. We have to take the next decision before this 90-day period expires on June 1. We’ll see what Washington decides at that point.

– There is an opinion that EU being slow with sanctions caused the existence of political prisoners, and the US on the other hand, by introducing sanctions released political prisoners.

There are some differences in the approach and mechanisms of the European Union and the United States, but our policy is fundamentally the same. In our case we were able to respond very quickly in August and September last year. And of course our sanctions against Belneftekim do not have a European equivalent. But I would encourage everyone in Belarus, whether civil society or the authorities, to look at the fundamental views of the United States and Europe as the same. We work very closely together with them here in Minsk, in European capitals, and in Washington.

We are looking at the situation with the same fundamental principles. With many European Union member states we share membership in NATO. We all, together with Belarus, are members of the OSCE. It’s easy to find certain differences of opinion or differences of mechanisms. I have to tell you I personally do not see as a good thing when Europe is criticized and the United States is praised, or vice versa. I do not think that anyone will succeed in dividing the fundamental views of the United States and Europe. And this can be said in different contexts, but working together is more important than working apart.

– However, Belarusians note that the stand of the United States in the issue of human rights is very principled as opposed to approach of the EU.

– European concern about the human rights is the fundamental basis for their sanctions. Being one country instead if 27, and having different mechanisms, the United States did take steps the European Union is not taking. But we do not have fundamental differences with Europe. Europe is taking its opportunities to engage or to have a dialogue with the regime, to discuss issues that are also of interest to us.

We do feel that the sanctions that we introduced had a concrete effect. And from our side we took very concrete practical steps to suspend some of the sanctions when we felt that decision was justified.

– Now when the so-called “dialogue” of the Belarusian authorities with Europe is taking place, the Belarusian opposition states that this dialogue should be preceded by an internal dialogue between the regime and opposition. Do you agree with such an approach?

– Many people use the word ‘dialogue’ as if it were some magical solution. We want to see dialogue with results, dialogue that is genuine, is open; that leads to mutual conclusions and hopefully to progress. Exactly what form it takes is up to the different participants in the dialogue to decide.

It is also important to have Belarusians talking to Belarusians in a practical way that can lead to more results.

Certainly I think it is an excellent advice to the authorities to have a very broad and very open dialogue with civil society.

– You observed the parliamentary elections in Belarus in 2008. They were recognized as not free and undemocratic by the world community. The same things happen in Belarus since the referendum held by Lukashenka in 1996 that changed the Constitution. Do you agree with Belarusian democrats who say today that the first democratic reform the Belarusian authorities must carry out is really free and transparent election?

– We support the dialogue of the authorities with the OSCE to provide some changes to the electoral code. The conduct of elections is very important for us. At some polling places the conduct was quite correct in September. So we were prepared — in fact, it was a part of our discussions, even in August — to make more positive steps with regard to sanctions if the elections would go well in September. We’ll have to see how things will go on from here, but yes, free, democratic elections are extremely important to us.

– Once the US hoped that democratic liberal values would be enrooted in Russia. But that hasn’t taken place. The opposite process is taking place. What conclusions are made from that by the United States?

– It’s not really for the American Charge d’Affaires in Minsk to comment on Russia. We have a well-staffed embassy in Moscow that is responsible for these issues. But I will take one point from the recent bilateral discussions between Russia and the United States. Our Secretary of State presented Foreign Minister Lavrov with a “reset” button. We are not yet in the position to have a reset button with Belarus. We have seen our diplomatic staff reduced by 90%. We have seen certain small improvements but there is much more that could be done. Extremely important for the United States, on a bilateral basis, is the release on humanitarian grounds of our citizen Emanuel Zeltser. His assistant has been released, but we still have no indications when Mr Zeltser might be released. There is great deal of speculations about him in the international press. We have one fundamental concern: he is an American citizen, and he is dying. We need this situation to be resolved.

– What is the possible way to resolve this situation when the Belarusian authorities do not listen to your calls you for the period of the year?

-Well, we hope at some point they will listen to our calls. In every discussion with the Belarusian authorities we have stressed the critical importance of resolving this issue.

– Once Lukashenka confessed that he asked $5 billion loan form the US, but he was refused. However, Russia and the IMF have given loans to Lukashenka. Is it moral and economically expedient to give loans to the dictatorship? The dictatorship is supported in this way. It is obvious that the money is given not to the Belarusian people and not for holding reforms, but to support the existing repressive system.

– We were asked about a bilateral loan from the United States. In the present economic situation we are not providing bilateral credits. As with other countries, we recommended that Belarus pursue a loan from the International Monetary Fund. It was our hope that the credit from the IMF would have ties to structural economic reforms. Because we did not see that in the IMF loan, the US voted against it. We do not have a veto, we are just one of the countries that votes.

In any economic crisis there is always criticism of the authorities. It was certainly a very difficult and unpopular step — but a very practical one — to devalue the Belarusian ruble. That devaluation of the currency, and certainly the currency slipped somewhat further since then, helped to increase the amount of exports that Belarus can make, particularly to Russia. Although unfortunately so much of the economy in Belarus depends directly on the state and the state budget, it was a necessary step to devalue the currency.

We will see over time what other steps are necessary. The IMF is still in dialogue with Belarus. Credits that are tied to structural reforms would be received more positively by the United States.

And there are many ways: banking reform, changing property and real estate ownership laws, making privatization much more transparent, much more open. We will continue to watch the situation and have close consultations with the IMF.

The alternative to this is of course the economic collapse of Belarus. While there can be a discussion about the fundamental causes of such a collapse, I think that vast majority of people would agree that economic collapse would not be in the interest of Belarus’ sovereignty and independence.

– As we see, the regime is just accumulating debts without making economic reforms. For today the foreign debt of Belarus is about $20 billion.

– As for the United States, as I’ve said, there is no possibility of a bilateral loan. Regarding the IMF, there is currently no request for additional credit. I believe there is a possibility of a certain credit coming from the World Bank. But you should talk to the World Bank office about that. There is this recent currency swap with China, that is an interesting step. Russia is providing some portions of its loan to Belarus. I haven’t discussed that at the official level, but I understand that there has been a request for further 3 billion dollar loan from Russia. I’m not an economist, but I think the hope is that it would be possible to move through the crisis this year. We’ll have to see what happens, but I don’t think Belarus can succeed by simply getting more and more credits or expecting more and more credits.

– How the US estimate the stepping up of military cooperation between Belarus and Russia, namely, creation of the common regional air defense system and the collective rapid reaction force in the framework of the Collective Security Treaty Organization? Some observers have already called them military groupings of “chasteners” created to crack down upon peaceful protest rallies in the countries of the treaty.

-We want to see Belarus continue to be a sovereign and independent state. We would like to see the people of Belarus choose the country’s path of economic and political development. We are certainly very well aware of Belarus’ close military cooperation with Russia. We do not fear that, we do not see that as a threat. We and other countries continue to inspect military units in Belarus, as Belarusians do elsewhere.

I think, based on some recent initiatives of President Obama, that there will be some more discussions about missile defense programs. That is a topic of interest for Belarus.

We hope that as part of our dialogue with the authorities — and at some point when we have a defense attaché in Minsk — that we can clarify to those people in Belarus who do not understand the purpose of the anti-missile system. We disagree with the perspective that the anti-missile program being discussed as any kind of threat to Russia or to Belarus. That’s perhaps another topic to discuss with the authorities.

– You have spent a few years in Belarus. Foreign diplomats usually speak about the country of their stay tactfully: they note a rich history and culture, wonderful landscapes and warm-hearted people; they speak about their preferences in the national cuisine. But it is not a secret to anyone that the work of a Western diplomat in Belarus is not the easiest one. What were the most positive and the most negative impressions during your stay in our country?

– The most difficult day for me in Belarus was May 3 last year, because that was the day that I escorted a convoy of eleven colleagues, their family members, and their pets to the border with Lithuania. I do not remember the number of vehicles that crossed the border, but it was at least ten cars. And just one vehicle with me, my wife and some of my colleagues and the American flag, returned alone to Minsk. And we knew that we had a job to do here in the embassy, and that we would have to continue doing it. It’s been nearly a year since then. I’m very proud of how much we’ve been able to accomplish. And we still have some more to do before I leave in July.

In terms of positive impressions, there have been many. My first day in Belarus was a great source of satisfaction: to arrive here and embark upon a three-year assignment. I was very pleased to meet for the first time in August some of the last political prisoners who were released. We have gotten to know their families and worked for their release, but to meet them in person and hear what they had to say was very special.

Probably my proudest day in Belarus was July 4 last year when I hosted our Independence Day reception at the ambassador’s residence in Raubichi. I was very glad to show our guests that the flag of the United States was still flying in Belarus. And I particularly appreciated the opportunity to host so many Belarusians and diplomatic colleagues who had been very supportive throughout the difficulties of last year.

But there may be more difficult days and more positive days, we will have to see…

– All Belarusians who go abroad always say the same thing: it is easier to breathe in free countries. Returning back to Belarus, everybody notes how unhappy our people look. To your mind, what all of us have to do to breathe freely in our own country?

– We want to see the people of Belarus reach their own conclusions, make their own choices, to consider the situation in their own country, to consider conditions in other countries. I would encourage people here to practice the best principles of Belarusian hospitality, which means to welcome as many foreigners to this country as possible, even diplomats (laughs), but also when possible to travel to other countries and form their own impressions. The United States — I do not know whether it is a compliment or an insult — is called a “superpower.” I can tell you that after September 11, 2001, I do not feel that I am from a “superpower.” The United States is blamed for problems and never given credit for successes. I would like many more people from Belarus to be able to come to my country and form their own impressions. Then they can determine what they want and what they do not want for Belarus.

Source: Charter97

 




World Bank to provide Belarus with $125mn loan

Washington – According to Belarusian news agency Belta, the World Bank and Belarus have agreed on a $125 million draft loan for a new energy-effectiveness project.

The draft loan agreement is subject to approval by the Board of Directors of the World Bank before it will be officially signed. Belarus has not gained much aid from the World Bank in recent years and, if approved, this will be one of the largest projects sponsored by this intergovernmental organization in Belarus.

The $125 million World Bank loan will be used to assimilate energy-effective technologies at municipal boiler plants and at major power installations. The project envisages modernizing energy generating equipment in Barysau, Mahiliou, Ruba, Ashmiany, and Rechytsa.

The initiative was preceded by successful accomplishment of previous World Bank projects in Belarus. In particular, the modernisation of social infrastructure (the first loan totalled $22.6 million, the extra loan — $15 million) and rehabilitation of Chernobyl-affected areas ($50 million).