Minsk advocates for Helsinki-2
Minsk aspires to use all means available, including the OSCE to relax tension between Russia and the West. Minsk hopes that vigorous diplomacy and peace efforts will help reduce the risks of being drawn in the regional confrontation.
At the OSCE Ministerial Council in Hamburg, Foreign Minister Makei said that Belarus was ready to host a meeting for the leaders of Russia, the US, EU, and China "to have a frank conversation about the reasons of the crisis in the international relations”.
Last week, the OSCE released the final report on the 2016 parliamentary elections in Belarus, emphasising that despite some improvements, the elections were non-transparent and non-competitive, and recommending improving the electoral procedures. The Belarusian Foreign Ministry said the conclusion created a basis for a dialogue. On December 9th, 2016, Minsk hosted a panel discussion on the implementation of the National Human Rights Plan with the participation of public officials and civil society representatives.
Belarus’ cooperation with the EU and international institutions has taken a constructive path. The Belarusian authorities aim to strengthen the Belarusian-European relations by enhancing Belarus’ image as a neutral state and a peace facilitator in the regional conflicts. That said, Minsk is eager to continue the Minsk process, preserve and develop good-neighbourly relations with Ukraine.
The Belarusian authorities believe the Belarusian-European normalisation is important, primarily because they are interested in reducing tension in the region, which threatens Belarus’ security. Minsk hopes that vigorous diplomacy and peace efforts will help reduce the risks of being drawn in the regional confrontation.
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.