Russia has no means to oust Lukashenka from power

January 09, 2017 10:00

Russia’s influence on Lukashenka is huge, but still not enough to prompt him to leave his post. Thanks to the domestic policy carried out by the Belarusian leader, Moscow no longer can stranglehold the Belarusian authorities. Statements about the alleged plans of the Kremlin to overthrow Lukashenka are insinuations aiming to put their respective owners in the spotlight.

During all 22 years of his rule, Lukashenka’s main goal was to strengthen and preserve his power. He created an efficient system preventing any challenge to his leadership inside the country.

Since coming to power in 1994, Lukashenka has held several purges among senior officials and the power block. Currently, the people, whose status roots in the existing political system with Lukashenka at the core of it, lead the country. Those who had the imprudence to demonstrate own ambitions, or dissent, or the support from the outside of the state apparatus, were promptly stripped of the real power. Including through the appointment to honorary positions, which seem important, but lack real levers of influence.

Both, the state apparatus and the law enforcement, including the security services, were reorganised. Belarus has incorporated a comprehensive monitoring system to control senior officials and directors of large enterprises. Loyalty of the law enforcement is ensured through internal institutional control and security and due to inter-departmental competition. The system has proved its efficiency, inasmuch as in the past 22 years not a single document leaked from the government system proving policy-relevant information.

In addition, time did its part: 25 years after the collapse of the Soviet Union there was a generational change in the government leadership. Those having close ties with Russia have sharply decreased in number.

Statements about the alleged plans of the Kremlin to overthrow Lukashenka are insinuations aiming to put their respective owners in the spotlight. The objective reality is that over the years of Lukashenka’s rule, Russia’s abilities to influence the power landscape in Belarus have been reset to zero. In order to oust Lukashenka from power, Moscow would have to step into an open and sharp confrontation or even to use force. And the result would hardly be predetermined.

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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.