Alexander Lukashenko ignores the lessons of the past and orders high growth rates in 2012
The government has been forced to plan high growth rates in 2012 and to forget about the plans to stabilize the currency market. In 2012 the economy will be funded by emission once again. The lack of a new stabilization loan will set new tasks and challenges for the government and the National Bank.
Alexander Lukashenko tasked the government to achieve 5-5.5% of the GDP growth in 2012. Lukashenko said, “For those who do not agree or unable to fulfill this task we shall find another job. However after I sign this document, everyone should run around the country and say that it is possible, it is good, let’s start mobilization. Don’t you dare to talk to the media! God forbid I receive the opposite reports!” The new plan, envisaging 5.5% of the GDP growth, controlled prices and wages increases should be ready by mid-December.
Mr. Lukashenko has ignored the views and concerns of Deputy Prime Minister Rumas and his supporters in the government regarding the possible negative consequences for the economy (inflation, devaluation) with the GDP growth higher than 1-1.5%. In 2012 the economy will be funded by money emission once again.
De jure the parameters of the annual economic growth have not yet been approved, however one of the consequences of their announcement by the Government could be that the IMF Mission anticipated to visit Belarus on 12-16 December, will not come. The orders of the head of state imply that the economic policy of the country will resume stimulation of growth via emission.
The lack of a new stabilization loan will set new tasks and challenges for the government and the National Bank and it is unclear how they will be addressed, given the IMF loan in fact has already been incorporated into the basic development plan. Moreover, this amount significantly exceeds the amount of benefits to be received from the reduced gas price.
Also, wishful thinking of Lukashenka conflicts with the main priorities of the NBB monetary policy. In order to achieve 5% growth of the GDP the NBB will be forced to issue emission credits and to review its monetary policy priorities.
Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.
The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.
Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.
For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.
Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.
The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.