Belarus is incapable of conducting peacekeeping operation in Donbas

November 21, 2016 9:01
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Minsk is concerned about the decline in its importance as the negotiation platform for those engaged in the conflict in Ukraine. Due to the limited own resources and capacities, Minsk is only able to keep up interest with bold statements.

On November 17th, 2016, during the press conference for the Russian media, Lukashenka said that Belarus was ready to take control of the 400-kilometer stretch of the Russian-Ukrainian border in Donbas.

Minsk negotiation process around Ukraine has played a significant role in the Belarusian-Western normalisation. Providing a platform for negotiations allowed Minsk to keep a distance from the parties to the conflict, from Moscow in the first place. However, in recent months, attempts to achieve a political settlement in Donbas reached an impasse. Minsk as a negotiations platform has been devalued, which could prompt the Kremlin to apply pressure on the Belarusian government in order to force it to take a pro-Russian position not only in the confrontation with Ukraine, but also with the West altogether.

Taking control of the 400-kilometer Russo-Ukrainian border stretch in Donbas will require a large-scale military and police operation in order to establish effective control not only at the border, but also in the border area of Donetsk and Lugansk regions. That said, only the protection of the border will require at least 4,000 troops; and with the rear structures and the need to monitor the Donbass border areas, it would be closer to 10,000 troops. Based on the international experience, maintenance costs for one soldier would total circa USD 30,000 per year. In addition, due to the highly volatile situation in the Donets Basin, casualties among hypothetical Belarusian troops are virtually inevitable.

Belarus has neither the military, nor the financial capacity for the operation in Donbas. Inevitable losses among the Belarusian troops in a foreign war are fraught with a wave of discontent in Belarus and a political crisis to follow. Lukashenka’s statement about Belarus’ readiness to carry out an operation in the Donbass region is a pure propaganda having no practical implications.

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Economic growth in Belarus may be delayed until 2018
January 23, 2017 11:13
Image: Novy Chas

The Belarusian economy was shrinking for the second year in a row, in 2016, by 2.6%. Before 2015, the Belarusian economy was growing for 18 consecutive years. In order to stop the economic slump, Belarus needs a favourable international market situation and to settle all trade disputes with Russia. The Belarusian economy is unlikely to recover before 2018.

According to the preliminary reports, in 2016, Belarus had a 2.6% GDP decline. The Belarusian economy was shrinking for the second year in a row – a 3.8% decline in 2015. Most economic indicators in 2016, except in agriculture, had negative values. Wholesale trade had the most negative impact on GDP due to falling exports of potash fertilizers and petrochemicals, as well as construction, due to reduced investment in fixed assets by enterprises and decreased housing construction volumes.

In 1996-2011, the Belarusian economy was growing most rapidly, average GDP growth rate was 6.9% per year. In 2011, amid emission injections in the economy, disproportionate growth of wages against the background of low productivity and significant financial aid for loss-making agricultural, construction and industrial enterprises, the Belarusian rouble depreciated by three times. The absence of economic reforms and significant relative weight of state in the economy amid deteriorating external economic environment led to a sharp economic slowdown – circa 1% per year in 2012-2014; the slowdown was followed by the recession, caused by a slump in the prices for basic exports from Belarus and cuts in soft loans issued to maintain production volumes.

Belarus’ budget for 2017 is based on anticipated 0.2% growth. The expected decrease in the construction volume is circa 17% in 2017, which is unlikely to allow industrial growth with the renewal of fixed assets by legal entities. Even if wages grow, they will be offset by the 15% increase in utility tariffs by late 2017. Wholesale trade is largely dependent on the potash market situation and the oil processing volume at the Belarusian refineries. In view of the planned reduction in Russian oil supply in Q1 2017 to 4 million tons, wholesale growth is only possible provided the potash market situation improves. In late 2016, engineering output increased significantly, but amid the trade conflict with Russia, she may prioritise purchases from domestic manufacturers. In the given circumstances, Belarus’ GDP would only grow in 2017, provided the Russo-Belarusian dispute over energy supplies was fully resolved, Russia removed barriers for Belarusian exports and the potash market situation improved. That said, Belarus’ GDP in 2017 is likely to decrease by 0.5% - 1% and is likely to be followed by an attempt to overcome the recession in 2018.

The Belarusian economy has been in recession for two consecutive years. Amid anticipated decline in retail trade, construction and unresolved dispute over energy supplies from Russia, economic recession is likely to persist in 2017 and the economic recovery may be postponed until 2018.