EBRD plans further support for SMEs in Belarus
The European Bank for Reconstruction and Development is planning to implement five new projects in support of small and medium businesses in Belarus. Yet, the possibilities of bilateral cooperation between Belarus and the EBRD are limited because the Bank has refused to participate in public sector projects after the dissolution of the opposition protest in December 19, 2010. The implementation of political and economic reforms in Belarus is the key condition for increasing the Bank’s volume of operations in the country.
On 11 July, EBRD Director for Belarus, Moldova and the Caucasus Paul-Henri Forestier announced that the Bank is planning to implement five new projects under the program to support small and medium businesses in Belarus. This year projects in the field of information technologies, agriculture and services (network of shoe repair shops \"Yalina\") have already been implemented.
As of April 2012, the EBRD has invested 844.5 million euros while implementing 43 investment projects in the private sector of Belarus. The total value of projects, implemented with the support of the Bank, amounted to 1.175 billion euros. In 2011, the volume of EBRD investments in Belarus reached a record 194 million euros (see Figure 1).
Figure 1. Number of projects and the volume of EBRD investments in Belarus in 2001-2011.
In 2012 the EBRD will continue to support private sector development of the Belarusian economy. The bank is currently involved in negotiations with regard to the provision of debt financing and participation in share capital of private companies.
In the second half of 2012 the Bank will prepare a new three-year country strategy for Belarus, which will be adopted by the Board of Directors of the Bank at the end of this year. The current strategy of the Bank was adopted on December 10, 2009. Originally, the document provided for the possibility of cooperating of the EBRD with the authorities of Belarus in the sphere of privatization of state assets.
However, after the dissolution of the opposition protest on December 19, 2010, the Bank \"calibrated\" the existing strategy and refused to cooperate with the Belarusian authorities (including participation in government projects and cooperation with the state-owned banks).
Carrying out political and economic reforms in Belarus would allow to return to the previous plans of bilateral cooperation, and thereby significantly increase the volume of operations of the Bank in the country.
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.