Is Belarus on brink of multiple devaluations?
Over BYR 200 trillion will be allocated from the state budget for the implementation of the Agro-business development plan for 2016-2020. Previous programme has failed and allocated funds have contributed to the devaluation of the national currency. Since Belarus has to fulfil the terms of the EFSR credit agreement, which restrict soft loans from the state, she is likely to attempt implementing most of the plan, while exceeding soft loan volumes in order to ‘overcome recession’.
On March 11th, 2016 the Programme aiming to create conditions for sustainable development of agriculture was approved. To implement the programme, the state will allocate more than BYR 92 trillion from the state budget and BYR 120 trillion of loans, of which more than BYR 30 trillion - soft loans for current operations and investment projects in the rural area.
If implemented, the programme should help increasing exports of agricultural products and foodstuffs to USD 6.2 billion by 2020, and labour productivity in agriculture by 1.4 times compared with 2015. About BYR 30 trillion will be spent on agricultural equipment, mainly domestically produced, which should also stimulate domestic engineering.
This programme is a continuation of the previous state programme for sustainable rural development in 2011-2015. It was supposed to achieve, by 2015, equal average wages in agriculture and in the country, USD 7.2 billion worth of export in agriculture, and profit margin at 10-11%. In December 2015, wages in agriculture were 65% of the national average, the profitability of sales at 2.4%, export of agricultural goods at USD 3.6 billion and more than 60% of agricultural enterprises were unprofitable without the state support. Significant funds allocated for the programme implementation have led to increased pressure on the national currency and subsequent devaluations in 2011-2015.
In 2016, Belarus will start a new rural development programme, which is likely to create preconditions for artificial economic stimulation amid economic decline by 4% and eventually will lead to devaluation of the national currency.
That said, Belarus has signed a loan agreement with the EFSR, on the condition that she will restrict soft loans to the economy. Without the state funds, the agro-development plan is not feasible. In these circumstances, Belarus may try to implement most of the terms of the loan agreement except those connected with the soft loans under the pretext that she needed to overcome recession and increase food supplies on the Russian market.
Overall, Belarus is attempting artificial means to overcome economic decline.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.