Russia, not Belarus, is interested in uncertainty in bilateral relations
On May 29th, President Lukashenko participated in the Supreme Eurasian Economic Council meeting in Astana, and on May 31st he met with Russia’s Prime Minister Medvedev in Minsk.
Lukashenko’s meetings with Russia’s top leaders failed to resolve the most pressing economic issues for Belarus. Belarus’ negotiating potential in bilateral relations is weakened by the intensified Eurasian integration.
Potential enlargement of the Eurasian Economic Union reduces Belarus’ bargaining opportunities. On May 29th in Astana, three Customs Union members granted Kyrgyzstan and Ukraine with observers’ status, and on May 31st, Kyrgyz and Ukrainian delegations signed in Minsk a memorandum on expanding the cooperation with the Eurasian Economic Commission.
Thus, the Eurasian integration expanded to “3 +2” format. This – even nominal – change de facto narrows Belarus’ negotiating opportunities in trade and economic disputes with Russia. First, Lukashenko’s current relationships with Ukrainian and Kyrgyz senior management in particular, are strained. Second, since 2011 President Lukashenko has a critical shortage of assistants he could trust to organize Bishkek-Astana-Kiev-Minsk negotiations to ensure the joint pressure on the Kremlin.
Finally, the cancelled bilateral meeting between Putin and Lukashenko in Astana, where both presidents could have discussed the privatization of Belarusian property and oil supply in Q3 and Q4 2013, implies that Lukashenko has once again failed to resolve the most disputable Belarusian-Russian cooperation issues.
Thus, in the coming two weeks – until mid-June, when oil supplies to Belarus are supposed to be signed – bilateral negotiations will continue at a lower governmental level. Consequently, it will be hard for Belarus to retain its negotiating position and to continue delaying enterprises’ privatization in favor of the Russian capital.
In this connection, Lukashenko’s statement on May 31st at a meeting of CIS government heads in Minsk, with reference to the negotiations at the Astana Summit, is interesting. He said that Russia allegedly was ready “in a year and a half, or maximum by January 1st, 2015 to lift virtually all tariff restrictions, including in the oil and gas industry”.
Potentially, in this way Lukashenko is preparing public opinion and the Belarusian elites in particular, for economic concessions that he is going to make in the near future. In addition, this statement is obviously in line with his pre-election strategy and will be included in the 2015 presidential campaign. Meanwhile, Russia provided no comments about future potential preferences for CES members. This topic could have been discussed and Lukashenko could not resist and was the first to disclose that information.
According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.