The Way They Do Reforms in Belarus: Actions, Framework, and Foreign Partners
Before the elections, many publications dealt with the subject of reform in Belarus. The analysis revolved around the post-Soviet space analysing the explicit degradation of the era of a commodity economy. This means that all these states will have to change, including Belarus.
Minsk has already signalled by its actions its intention to change many things in its economy and politics. It is not only about its participation in the Ukrainian events. Belarus has taken seriously the optimisation of economic processes.
Specific Actions They Do Not Call Reforms in Belarus
Lukashenka said clearly during his inauguration ceremony that reforms were a “destruction of the foundations of the state system”.
In terms of the Belarusian ruling elite, the words “reforms” and “reformism” are almost identical to the word “evil”. For Lukashenka, a declaration about the need for “structural reforms” would be equal to a declaration “I have been wrong, and my policy is inefficient”. Instead of these “bad” words, Lukashenka uses “modernisation”, “development”, ‘improvement”, “transformation” and other similar words.
Thus, the “reforms” applicable to a Ukrainian scenario are hardly possible in Belarus. There will be no discussion or debate. Nor will the regime use the word “reform” (at least, in language most of the population understands). Whether any deeds will follow is another question.
The sanctions have been and remain the key problem for Belarus. This is not only an issue of trade. The imposition of sanctions limits investment opportunities and obtaining long-term cheap loans. Besides, what is most important, is the need for Belarus's to engage in scientific cooperation and technology exchange. For now this remains impossible. However the problem's resolution is near. The United States has actually lifted most restrictions it imposed, and the European Union has suspended sanctions.
Moreover, even prior to the formal lifting of sanctions, the restrictions on scientific cooperation were cancelled. As a result, during the spring and summer of 2015 Belarus entered into projects in the framework of the Horizon 2010 programme, it joined the Bologna Process unexpectedly and intensified cooperation with the European Research Council.
Belarus carries out an interesting policy towards Ukraine Read more
Belarus carries out an interesting policy towards Ukraine in the unusual role of a donor. The Belarusian State Committee for Science and Technology, together with the Ukrainian Ministry for Education and Science, launched joint research programmes. The list of topics includes optics, new materials, bio-technologies, pharmaceuticals, computer science, energy and energy efficiency. Publications analysing “Belarusian reforms” called all of them a priority in the “new economy of the country”.
Money, Reforms, New and Old Partners
At the turn of 2005-2006, when Russia’s influence on the economy became extremely important, Belarus understood that the commodity economy would not become successful. Since then, Belarus has started a gradual movement towards seeking a counterweight to Russia. The Belarusian authorities are trying to find new options and allies beyond the usual East – West axis. In particular, they are working on the development of ties from the Baltic to the Black Sea, along the North – South axis.
Besides, they are trying to work among the old members of the European Union. However, a number of problems remain. The traditional “power centres”, Germany and France, are rather strongly linked to Russia.
Here, a new partner of Belarus has emerged, the United Kingdom Read more
Here, a new partner of Belarus has emerged, the United Kingdom (UK). By trade volume the UK has unexpectedly become Minsk’s second foreign trade partner. Besides, “friendship” with the United Kingdom is facilitating an intensification of cooperation with almost two dozen further countries which are members of the British Commonwealth. These countries are ready made money, technology, and sales markets. Significantly, exports to the Commonwealth countries grew by $2.431 billion during the first 8 months of 2015 in comparison to 2014.
Ukraine’s attempt at European integration opened a window of opportunities to Lukashenka. Further developments and Belarus’ own competent policy have extended it. These are the issues of sanctions and foreign trade. The dynamics of trade turnover between Belarus and the European Union appear much more promising than the path of "going to Europe" which Ukraine has embarked on.
In sum: Belarus understands that there will be less money and works on plans to get access to the funds. So far it has managed to achieve an increase in funding. In parallel, it is growing a network of political connections and the weight of its political lobby, and this is against a backdrop of a collapse of its neighbours’ influence. There is one small thing, an efficient state.
It Is All about People
Now, let us talk about the managers. Indeed, the “quality” of most Belarusian managers remains poor. However, here we face some interesting facts taken from the practical activities of the country’s leadership.
Both presidential advisor on economic matters Kiryl Rudy and deputy head of the Presidential Administration Mikalaj Snapkoŭ made their statements at the October Economic Forum. Interestingly, independent research centres organised this event. The authorities see most of these centres as an “opposition”. Just a year ago, it was impossible to imagine even the very fact of this kind of forum being held in Minsk, let alone a statement by a top official of the Presidential Administration.
The Belarusian authorities gently engage clever “opposition activists” in a dialogue Read more
In Belarus, the MOST programme started unbeknown to many, the financing of 500 visits of stakeholders and managers in different spheres (NGOs, business, authorities, and research) to the European Union to establish partnership relations. The number of participants is 1,500 people. Such a scale in the framework of Belarus could entail important changes.
The Belarusian authorities gently engage clever “opposition activists” in a dialogue. The question is not about the participants in the presidential elections, rather there is silence there. The authorities invite those who generate ideas on the country’s development, as well good analysts, to participate in discussions and closed meetings.
Thus, the situation with personnel policy is also very interesting. A statement of fact is that there is a shortage of personnel. And there are signs of work in this area.
Quick Solutions and the Slogan “No to Reforms”
As Kiryl Rudy said at the October Economic Forum, “One can get an official answer whether the reforms will happen in 2016 only from the official documents and decision of the head of state”. Let us use this recipe. I will cite a few facts, which happened during the last few weeks.
In 2016, concessional financing and subsidies will be significantly reduced. Those who will still be able to raise funds will survive. The others will undergo restructuring through bankruptcy. The same will happen to agriculture.
The National Bank and the Ministry of Finance pursue a rather tough policy on the rehabilitation of the financial system Read more
The parliament is considering a draft law on transitioning from a planned economy to “indicative planning”. The National Bank and the Ministry of Finance pursue a rather tough policy on the rehabilitation of the financial system, as well as declarations (including those ofLukashenka) about the “inappropriateness” of getting “expensive” money on foreign markets.
The topic of “financing” should also include such an instrument as the public-private partnership, which is expected to be enacted in legislation in 2016.
Since 2016, Belarus will have new money in circulation. The redenomination will take place, which includes the introduction of Belarusian coins. Automatically, it means giving up the opportunity to use inflation to control the economy.
Back to the Question: Will There Be Reforms in Belarus?
The point is simple, the regime will not change one iota politically. It will be the same authoritarianism. As for the economy, we are unlikely to hear loud statements about “Belarusian reforms”. How should we call what is happening today?.. Fundamentally, it does not matter.
On the other hand, people in Belarus will fail to feel a positive effect in the coming years. After all, if one proceeds from the thesis of economic reform, the quality-of-life forecast for an average Belarusian is negative for 3 to 5 years.
And even in Belarusian conditions, the reforms will not give a positive effect before 2020. Incidentally, this is a dig at populist reformers who say that a “people’s paradise” will happen soon in Ukraine. There has been not a single country in the world where structural reforms gave an instant result.
In any case, it will be interesting. One country is being publicly “reformed”, with beautiful slogans, TV shows and political battles. The other one seems to be against the reforms but it does something. It is an interesting question to what will be the result?
Belarus-Russia Military Cooperation: Can the Kremlin Dictate the Terms?
On 26 October Russian President Putin planned for a discussion about the plans for establishing a Russian airbase in Belarus with his Belarusian colleague Lukashenka. They did not meet.
Instead, a Russian general told the press that the base plans had been agreed on with the Belarusian side. The Belarusian defence ministry retorted that there was no political decision on the facility.
The airbase is already two years behind schedule. Unilateral statements made by Russian officials throughout the whole of this period have concealed a lack of progress on the base. "Many years of cooperation between Minsk and Moscow failed to yield an efficient mechanism of joint defence," lamented Russian Nezavisimaya Gazeta daily.
Meanwhile, the number of Belarusian officers studying in Russia has recently declined, as did the scale of major regular joint military exercise in September.
Minsk Makes Clear Its Opposition to Deployment
Russia proposed the establishment of its airbase in Belarus in April 2013. Yet before the October election Lukashenka dismissed any such plans. He also accused Russia's ruling establishment of leaking fake information to the press.
Lukashenka and Putin were expected to talk about the base at a summit in Astana in October this year. But after Astana, Belarusian officials continued to firmly oppose the airbase. The Belarusian defense minister Andrei Raukou and Foreign Minister Uladzimir Makei in late October criticised the idea of the Russian airbase.
Furthermore, although the joint conference of the defence ministries of Belarus and Russia on 21 October discussed the Single System of Air Defence, it failed to touch upon the issue of the Russian airbase, though it would be an indispensable part of the system.
Lukashenka categorically refuses to host an airbase. He wishes to keep guarding Moscow's sky, as he should in accordance with his alliance obligations, with the Belarusian armed forces. He continues to stop the airbase in the hope of increasing the economic benefit Belarus receives from Moscow.
Russian Airbase in Belarus: Political, Not Military
Given Minsk's firm position, Moscow again decided to change the plans. It already accepted moving the base away from the borders with NATO Members (from Lida or Baranavichy to Babruysk) as well as delaying its establishment.
Moscow apparently wants to get the air base in whatever form Read more
On 24 October, the chief of the operative directorate of Russia's Air and Space Forces, Alexander Lyapkin, speaking at a seminar in Moscow announced that Russia wants to deploy 12 fighter jets Su-27 and four helicopters Mi-8 in Belarus. That is half of what Russia demanded during the first discussions.
Such flexibility raises questions about the strategic meaning of the base. After all it has been moved from one end of Belarus to another, and had its force deployment reduced by half. Moscow apparently wants to get the base in whatever form. Apparently it needs it not to resist NATO, but primarily for other purposes.
By establishing a military base in Belarus, the Kremlin achieves another, primarily political goal, namely eliminating any vestiges of Belarusian neutrality which Minsk had built up in the past decade by distancing itself from numerous Russian policies (for example on Georgia and Ukraine) and looking for alternative partners.
Two Decades of Defence Cooperation: Declarations and Realities
At a joint conference of the defence ministries of Belarus and Russia on 21 October, Russian military officials complained that despite 20 years of tight military cooperation between the two countries, the Union State of Belarus and Russia still lacked a clear-cut defence system.
The conference also discussed the implementation of the agreements on the external borders of the Union State and the Single Air Defence System. The latter is in a pitiful condition. In 2013, Moscow declared the establishment of the Single Air Defence System of Belarus and Russia, but it does not currently function.
Belarus in military terms is closely linked with Russia yet the declarations about these links and reality differ a lot. Thus, although formally Belarus buys almost of all the newest armaments which it cannot manufacture itself from Russia, that is only half true.
Minsk cannot afford to buy major military systems despite the degradation of its military equipment. Read more
First, Minsk cannot afford to buy major military systems despite the degradation of its military equipment. This year it acquired four Yak-130 trainer jets and plans to buy four more. The publicised deal on buying armoured personnel carriers from Russia for one battalion remains more a plan than a deal. These were the only major purchases the country made since independence. The only exception were surface-to-air missile systems. Moscow delivered these to Minsk only because Russia could not let Belarusian air defence defending Russian airspace decline.
Second, after the Kremlin in the late 2000s and early 2010s refused to give Belarus some state-of-the-art arms like the Iskander short-range ballistic missile system, Minsk began cooperation with China in 2009 on designing new weapons. In 2012-2013, Minsk reportedly signed two agreements with China on designing two major arms system: a multiple launch rocket system (MLRS) and surface-to-air missile system. The former has already borne fruit, as Minsk this year demonstrated the Palanez MLRS.
Declining Cooperation Volume Figures after Crimea?
Moscow may be worried about Belarusian-Russian integration in the sphere of military education, too. Belarus sends many of its military specialists to train in Russia, in the last 17 years over 1,126 officers have been trained. However, the number of Belarusian officers sent to study in Russia after the Ukrainian crisis has rapidly declined. A year ago there were 447 such students, now there are only 374.
Another example is joint military exercises. Belarus and Russia regularly held large-scale joint exercise, like Shchyt Sayuza. Few commentaries mentioned the fact that this year significantly fewer forces had participated in this exercise.
Four years ago, 12,000 troops and 450 vehicles demonstrated their skills in Shchyt Sayuza-2011. This year Minsk and Moscow committed only 8,000 soldiers and about 400 vehicles. Also for the first time ever, a Belarusian officer, the chief of Belarusian General Staff, Aleh Belakoneu, commanded the joint forces at the exercise.
Evidently, Belarus maintains and increases its autonomy in the military sphere. Minsk will no longer clash with Moscow and it remains a partner of Russia. Yet the Belarusian government itself takes decisions. Although many, especially in the Russian media, try to prove the contrary, every noticeable aspect of military cooperation provides evidence of Minsk's increasing autonomy.
Moscow wants to counter this tendency by getting Russian combat units placed in Belarus. The establishment of a Russian airbase will clearly increase Moscow's leverage over Belarus and its possibilities for more balanced and neutral policies.