Can Belarus Overcome Its Economic Doldrums?

Facing a stalemate in its negotiations with Russia, Belarus unilaterally increased by 50 percent its tariff on the transit of Russian crude oil beginning on October 11. This is clearly a partial antidote to the lingering lack of bilateral agreement on the price of Russian natural gas for Belarus and the subsequent decision by Moscow to cut back on crude oil sold to Belarus. Now, the price of transporting one metric ton of oil through Belarus will amount to 400.98 Russian rubles ($6.37) instead of 267.32 rubles ($4.25) (Lenta.ru, October 2). At the same time, President Alyaksandr Lukashenka announced that Belarus is indeed negotiating with Iran on potentially buying a large amount of oil from that country (Belta, October 7). Already, Russia’s Federal Antimonopoly Service called Belarus’s unilateral transit fee raise “unthinkable” and a violation of established procedures (Tut.by, October 4). Meanwhile, Russian financial analysts have declared that Iranian oil would be too expensive for Belarus because of additional transport costs and the necessity for technological adjustments to a different brand of oil. The same analysts, nonetheless, agreed that Moscow should keep an eye on Belarus lest the latter’s attempts to diversify its oil supply eventually succeed (RIA Novosti, October 7).

Concerning the ongoing negotiations with the International Monetary Fund (IMF) about the resumption of its credit line to Belarus, Lukashenka declared that Belarus cannot meet the “ultra-liberal” IMF demands about raising out-of-pocket utility payments without raising wages. Such reforms, he claimed, would turn Belarusians into paupers and “undermine what the president of Belarus has been doing for 20 years” (Tut.by, October 3). And yet, a “source well informed about the nature of negotiations between the IMF and Belarus” assured the country’s major non-state online news outlet, Tut.by, that the negotiations in question are at an advanced stage, that “we would go down this path to its very end,” and “one should not overdramatize the situation” (Tut.by, October 5). The Tut.by source was most likely a member of Belarus’s delegation that recently returned from talks with the IMF in Washington. This delegation included Deputy Prime Minister Vassily Matyushevsky and the chairman of the National Bank, Pavel Kallaur.

The Belarusian Ministry of Economy has outlined the three economic growth poles for the country in the near future. First, it announced 74 innovation projects, 19 of which are supposed to be completed in 2017. These are projected to boost economic growth by 0.12 percent; by 2020, these projects’ contribution to the economy is expected to increase to 1 percent. Second, the ministry named the Belarusian-Chinese Veliky Kamen (Great Stone) industrial park, for which the year 2017 is expected to be decisive. And third, the economy ministry predicted the growth of small- and medium-sized private business (Naviny.by, October 3).

Lukashenka expanded on all of these and other issues in his October 7 speech before the Belarusian parliament (Belta, October 7). As usual, alongside straightforward messages contained in his address, there were some cryptic remarks as well. “To think that somebody else is a friend whereas Russia is a foe, is foolish,” remarked Lukashenka, once again marking a clear distinction between Russia’s political class, which he said may occasionally act without regard to the needs of the Russian people, and ordinary Russians, who “think the world of Belarusians.” He once again rejected any attempts to set the Russian language against Belarusian. Although in Minsk all recorded announcements on public transportation and many written signs are actually in Belarusian, this language is seldom heard in the street.

Regarding economic reforms, Lukashenka expressed the view that whereas he himself is ready for tough restructuring, the Belarusian people are not. For example, they would not be able to afford all the utility cost increases, he asserted. As for the recent (September 11) parliamentary elections, Lukashenka confirmed “our desire to please everyone East and West.” He acknowledged that while he would want even more opposition-minded people in the parliament (to which two members of the opposition were elected for the first time since 2004—see EDM, September 13), the opposition actually would not know what to do with power even if it managed to acquire it. Strangely enough, Lukashenka’s scathing remarks about the opposition were different in tone but not in substance from the remarks by his self-described opponent, Svetlana Alexievich, the 2015 Nobel Prize laureate in literature. Alexievich had recently opined that “our people are not ready to fight”; that “strong-willed people in the opposition are not too numerous”; and while she worships Alayksandr Statkevich, a 2010 presidential hopeful who spent six years behind bars, he is just “a romantic,” i.e., an idealist (Svaboda.org, October 7).

Lukashenka also expressed his non-great-power view of international politics. Notably, he said there is a cult of brute force and argued that the attempts at engineering social revolutions in the Middle East have led to disaster. He also referred to the widespread criticism of himself for his alleged desire to “sit on two chairs” (the criticism most frequently heard in Russia regarding Belarus improving its relations with the West). In reply, he suggested that Belarus’s geographic location between Russia and Europe means the country is predestined to maintain good relations with both sides lest it “once again becomes somebody else’s province.”

Lukashenka explained Belarus’s standpoint on natural gas prices: he pointed to the low global oil price, with respect to which natural gas prices have always been negotiated, as well as to the absurdity of having vastly different domestic prices on energy between countries engaging in shared economic integration projects—presumably alluding to Belarus and Russia’s joint membership in the Eurasian Union, for example. Finally, he pledged to remove red tape and bureaucratic obstacles to private businesses and lauded the fact that some newly elected parliamentarians represent important areas of college and secondary education. The latter observation may be taken with a grain of salt considering the deplorably meager salaries at Belarusian colleges, even against the backdrop of the country’s average wages (see EDM, September 26).

Overall, there are ample signs of continuing attempts by the Belarusian government to pull the country out of its economic doldrums. And if the results of Minsk’s past efforts are indicative of future possibilities, it is likely that the economic decline in Belarus will soon be overcome.