Trade and geopolitics to counterbalance Russia – Belarus Foreign Policy Digest
With the summer holiday period finally over, Belarusian diplomacy has gone into overdrive.
In September – October, Belarusian officials spoke with representatives of over thirty nations, ranging from deputy foreign ministers to heads of state. Poland has transformed from being Belarus's staunchest critic to its main advocate in Europe.
The search for new export and investment opportunities has been the central element of most of these meetings. Geographically, Belarusian officials favoured Europe, Asia, the Middle East and former Soviet countries outside the Eurasian Economic Union – for the most part Russia's adversaries.
President Alexander Lukashenka was personally involved in diplomatic efforts. He travelled to China, Pakistan, Uzbekistan, Qatar, and the UAE, where he bragged about strategic partnerships and imminent breakthroughs. Europe, on the other hand, has so far remained off-limits for the Belarusian leader.
Europe: a high-intensity relationship
Over the past two months, Europe has remained Belarus’s preferred foreign policy partner for dialogue.
Foreign minister Vladimir Makei travelled to Warsaw on 10 October to further strengthen the rapidly-developing ties with Poland. Two weeks later, Poland’s Deputy Prime Minister Mateusz Morawiecki co-chaired a meeting of a joint commission for economic cooperation in Minsk.
During his encounter with Alexander Lukashenka, Morawiecki emphasised the prospects for cooperation in joint ventures, banking, and preservation of cultural heritage. Poland has become Belarus’s third largest trading partner (after Russia and Ukraine). Minsk seeks to almost double turnover within the next two years and reach $4bn.
Luxembourg's foreign minister Jean Asselborn has become the first foreign minister from Old Europe to visit Minsk since May 2015. On 14 September, he and Makei focused on Belarus’s relationship with the EU. The bilateral trade between the two countries remains modest ($6.7m in 2015); prospects for dramatic improvement are bleak.
In the last two months, Belarus’s deputy foreign minister Alena Kupchyna travelled to Sarajevo, Belgrade, and Bratislava to hold political consultations with her Bosnian, Serbian, and Slovak counterparts. She also received her Latvian and German compeers in Minsk.
Kupchyna’s trip to Copenhagen on 26 October warrants particular attention. This marked the first such meeting between Belarus and Denmark in six years. The Nordic countries have traditionally taken a tougher stance towards the Belarusian regime.
The foreign ministry also facilitated trade-promotion events in the form of business forums or days of economy in Riga, Vienna, Hamburg, and Brno as well as the Belarusian city of Homiel (which hosted Finnish business executives). Belarusian and German officials met in Minsk for a bilateral working group on trade and investment.
Belarus and Hungary have been trying to reverse the negative trend in bilateral trade by holding another meeting of the intergovernmental committee on economic cooperation in Minsk on 29 September. This time, the parties emphasised cooperation in financing and investment insurance. Hungary closely follows Poland in terms of intensity of bilateral contacts with Belarus.
Belarus also launched a multilateral trade dialogue with the EU. On 13 October, a delegation of the European Commission visited Minsk for the first round of talks. Speaking to the press after the event, first deputy foreign minister Andrei Yeudachenka expressed hope that these talks might eventually result in the conclusion of a trade agreement between Belarus and the EU.
The United States: an optimistic status quo
On 18 October, the United States announced that it would prolong temporary sanctions relief for nine Belarusian companies for six more months after 31 October. This came as no surprise in light of current trends in bilateral relations.
Minsk continued close dialogue with Washington in various domains, including sensitive security and defence matters. The Belarusian authorities have also avoided a return to politically repressive policies, thus providing no reason for a resumption of sanctions. However, the scale and pace of reforms have failed to warrant their full withdrawal.
US Deputy Assistant Secretary of State Bridget Brink, who visited Minsk on the same day, emphasised the particular importance of electoral reform in Belarus before further normalisation of bilateral relations can take place.
The new US administration is unlikely to examine relations with Belarus more closely before mid-2017, barring any drastic changes in Belarus’s foreign and domestic policy or in the security situation in the region.
The “Distant Arc” and Post-Soviet countries: trade and geopolitics
President Lukashenka’s state visit to China on 28–30 September resulted in the signing of twenty-six agreements in various fields. Relations between Belarus and China went from a simple “strategic partnership” to a “comprehensive strategic partnership featuring mutual trust and win-win cooperation”.
Officials and state media in both countries praised the visit profusely. However, the public is getting used to every highest-level bilateral encounter being labelled a “breakthrough”.
Belarus’s exports to China in January – August 2016 dropped to $189.6m, 32% of the same period in 2015 and 1.2% of total exports. China’s inefficient tied loans significantly overshadowed direct investment. The Belarus – China “Great Stone” industrial park has failed to attract the attention of Chinese manufacturers.
These facts will hardly discourage Minsk. Geopolitics have been an equally, if not more important factor in Belarus’s ties with China. Belarus needs China to counterbalance Russia’s influence. “If there is a strong and powerful China, there will be a sovereign and independent Belarus”, Lukashenka said in Beijing.
On a visit to Pakistan on 4–6 October, Lukashenka witnessed the signing of 14 new agreements between the two countries. Belarus and Pakistan have already signed more than 50 bilateral documents over the last 16 months.
However, the trade turnover is stuck at around $50m. Given economic realities, the much-touted goal of reaching $1bn turnover in the next four years looks like a pipe dream. No similar targets in Belarus’s relations with other countries have been reached so far.
Belarus’s trade relations with the UAE provides evidence supporting this assertion. Exactly two years ago, on a trip to Abu Dhabi, Lukashenka set a target of $500m turnover with the Emirates in 2015. The result: $29.7m in 2015 and $18.7m in January – August 2016.
The Belarusian president never gives up. On the last weekend of October he again went to Abu Dhabi with a stopover in Doha (Qatar). Trade with Qatar has been almost non-existent over the last few years.
Earlier in October, deputy foreign minister Valentin Rybakov toured Southeast Asia and the Middle East to hold political consultations and meet business executives in the capitals of Indonesia, Malaysia, Jordan, and Sudan. His colleague Evgeny Shestakov received delegations from Argentina and Chile in Minsk to discuss political and trade relations respectively.
On 24 October, Vladimir Makei welcomed Namibia’s Deputy Prime Minister Netumbo Nandi-Ndaitwah in Minsk. The Belarusian government took advantage of this first high-level meeting between the two countries to promote its agricultural and mining machinery and radiation control tools.
Meanwhile, Belarus’s Deputy Prime Minister Vladimir Semashko discussed trade relations with Vietnam in Hanoi through an intergovernmental commission.
In the post-Soviet space, Belarus has been focusing on developing trade with the EU associated partners: Ukraine and Moldova. A meeting of a Belarus – Ukraine working group on trade in Kyiv on 2 September helped to abolish the special duty of 39.2% on a wide range of Belarusian exports to Ukraine.
In Chisinau, Belarus’s Prime Minister Andrei Kobyakov sought to expand the range of Belarusian machinery assembled in Moldova.
The geography of Belarusian diplomatic efforts demonstrates the determination of the country’s leadership to decrease its dependence from Russia, both economically and geopolitically. Most of Belarus’s negotiation partners over the last two months have been Russia’s rivals on a global or regional level.
Negotiations with IMF, death penalty, change of the Constitution – digest of Belarusian analytics
Ostrogorski Centre analyzes Belarusian foreign and national security policy. Belarus Security Blog releases the September analysis of the situation in the field of national security and defence.
Prelude to KEF 2016: Aliaksandr Čubryk argues that the key reason for Belarus‘ negotiations with IMF is the recognition of structural reform needs.
Grigory Ioffe: a healthy dose of realpolitik might be a good prescription for the Belarus’ indecision malaise between Russia and West. Belarus in Focus: since the September parliamentary elections, the general political trends in the country remain. Analysts consider why Lukashenka wants to change the Constitution.
Andrej Kazakievič believes that Belarusian expert community needs to step out of isolation. This and more in the new edition of digest of Belarusian analytics.
Foreign and security policy
Ostrogorski Centre: Belarus becomes neutral to survive – Ostrogorski Centre releases the first major publication on neutrality in Belarusian foreign and national security policy authored by Siarhei Bohdan and Gumer Isaev. For a long time, the trend towards a real neutrality of Belarus was misinterpreted as Minsk opportunistically moving back and forth between Moscow and the West. Yet by the mid-2010s, these elements of neutrality became a reliable part of Belarusian foreign and national security policy.
Belarus the object of two peculiar tugs of war – Grigory Ioffe observes that pulled in opposite directions by two peculiar tugs of war – dependency versus magnanimity from Russia and interests versus values from the West – Belarus retains composure but suffers from lingering economic decline. The expert believes that a healthy dose of realpolitik might be a good prescription for the indecision malaise.
Situation in the field of national security and defense of Belarus. September 2016 – According to the Belarus Security Blog’s monthly monitoring, the Belarusian authorities are trying to get the problems of democracy and human rights out of the Belarusian-American dialogue replacing them by regional security issues. The economic crisis and the compression of the Russian financial support forced the official Minsk to be more active in the western direction.
Negotiations between Belarus and IMF: key points and balance of interests – Aliksandr Čubryk, IPM Research Center director, during a round table organised by the state news agency BelTA notes that "Belarus applied to the IMF for support under the enhanced structural changes mechanism, not for the stabilisation program, like last time. That is, Belarus recognises the existence of structural imbalances, that should be addressed to gain sustainable economic growth."
Election trends remain, cyclic recurrence interrupted – Belarus in Focus notes that for 1,5 months since the September parliamentary elections, general political trends in the country remain: the political environment’s mitigation, constructivisation of opposition, soft Belarusisation, etc. Thus, the vicious circle has been broken when liberalisation trends replaced by the deteriorating political situation after the electoral campaigns.
Lukashenka will change the constitution to hand over power? Hardly – On October 7, Aliaksandr Lukashenka in his address to outgoing and newly elected members of the parliament made a statement on the possibility to adjust Belarus' Constitution to meet present-day challenges. Analysts believe that a possible referendum on changing the Constitution is most likely a PR action because so far Lukashenka is not going to give any niches to anyone.
Why Belarusians want, but do not give birth to children – Belarusians dream of a family with two or three children, and men want a greater number of children. These are the results of a recent survey of the Belarusian Institute for Strategic Studies (BISS). The reproductive desire is constrained mainly by economic factors – availability of housing, child benefits, availability of kindergartens and the overall stability of the economy.
Crowdfunding turned from exotics into inevitable future – Trends in national funding, its inevitability and unqualified efficiency were discussed at the recent Second Conference on Crowdfunding in Minsk. In particular, the head of the Belarusian crowdfunding platform Ulej.by notes its success: in the first 12 months, the platform has attracted about $80,000, while every 4 months the amount of funding is doubling.
A new approach to professional development of civil servants in Belarus A wider use of foreign educational programmes and activities could become an essential component of the new approach to professional development of civil servants in Belarus. Read more
Safety measure or an ineffective tool for revenge? "Duel" on the death penalty in Belarus– Is the Belarusian society ready for the abolition of the death penalty or that is still needed? The TUT.by talk show Duel brings together human rights activists who take fundamentally different positions on the issue – Andrej Paluda, Human Rights Defenders against the Death Penalty campaign and Aliena Krasoŭskaja-Kaspiarovič, Region 119 human rights organisation.
Belarus resumes executions after EU sanctions dropped – The Guardian raises the points of the recent Human rights report on death penalty. According to a landmark investigation of FIDH and the Viasna human rights centre, Belarus, the last European country to retain capital punishment has resumed sentencing people to death since EU sanctions against its president were dropped this year.
Andrej Kazakievič: Belarus’ expert community needs to step out of isolation – Andrej Kazakievič, the director of Political Sphere Institute, shares the results of the 6th International Congress of Belarusian Studies that took place on 7-9 October, in Kaunas. Namely, Kazakievič notes that a new generation of analysts is growing as well as the Congress fosters and expands influence of the Belarusian expert community.
The tax system of Belarus. This paper provides a comprehensive analysis of taxation in Belarus. The author compares the dynamics of the tax rates and the tax revenue in Belarus to the world averages and to other countries of the Eurasian Union. The paper studies the harmonisation of the rates within the union and the efficiency of tax collection. Finally, the author discusses two possible reforms of taxation in Belarus and its possible consequences: an increase of VAT and reintroduction of the progressive personal income tax.
The tax system of Belarus The two possible reforms of taxation in Belarus and its possible consequences are discussed: an increase of VAT; reintroduction of the progressive personal income tax. Read more
A new approach to professional development of civil servants in Belarus. In order to adapt the skills of Belarusian civil servants to the rapidly changing modern environment and to develop their ability to generate and implement non-standard management tasks, Belarusian civil service needs a new approach to their professional development. A wider use of foreign educational programmes and activities could become an essential component of this new approach.
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.