Belarusian authorities plan to re-industrialise economy to support employment

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May 29, 2017 9:49

The Belarusian authorities are being prompted towards re-industrialising the economy and preserving a large public sector at the expense of Chinese loans. Apparently, the industrial lobby took advantage of the authorities’ fear of social instability amid growing unemployment. If plans for a large-scale industrial modernisation materialise, the authorities will abandon structural economic reforms.

The state is planning to invest in MAZ and BATE USD 500 million each and USD 645 million in Gomselmash.

In all probability, the industrial lobby has convinced the president to accept their vision of how to ensure employment for unoccupied human resources. Following protests against the decree on social dependants in February-March 2017, the Belarusian leadership was vigorously seeking ways to reduce the unemployment rate, which could, in the authorities' opinion, relax tension in society and prevent open discontent with socio-economic policies. Nevertheless, according to Belstat, in April 2017, layoffs outnumbered hires (53,815 people vs. 46,206), regardless of the mobilisation of the entire state apparatus to ensure maximum employment.

That said, after industrial modernisation derailed in Belarus in 2012-2014, the authorities revised their approaches and abandoned massive investment in state enterprises at the expense of the state. Most likely, some emerging signs of economic recovery in Q1 2017 (export grew by 20.7%, inflation at 1.7%) have influenced the authorities’ expectations and prompted them to resume large investments in state enterprises .

Apparently, the Belarusian leadership has decided to re-industrialize the economy and retain a large public sector in order to control the labour movement. In addition to large-scale investments in the existing production, the authorities are creating or planning to create new large-scale productions, most likely, with Chinese loans. For instance, BelJI plant, which would assemble Chinese Geely cars, has almost completed construction; its estimated production capacity is some 60,000 cars per year. In addition, Amkodor Holding is planning to build a new plant in Belarus to produce automotive and municipal equipment with USD 300-350 million investment.

Overall, the authorities are ready to disregard the growth in warehouse stocks at industrial enterprises for the second month in a row, the non-competitiveness of the Belarusian industry and the losses of industrial giants (MAZ, MTZ, etc.) over the past few years, in order to preserve social stability and high employment.

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Belarusian and Ukrainian Defence Ministries entangle in confrontation spiral
October 02, 2017 11:57
Фото: RFRM

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.

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