New inflation driver
Belarus’ Agriculture and Food Ministry increased the fixed prices for agricultural products (crops), used for public needs to be harvested in 2012. In particular, the purchase prices of cereals (barley, rye, wheat, oats, buckwheat, millet, peas) increased by 27%, rape oilseeds by 55%, sugar beet by 50%, brewing barley by 74%, grain for alcohol production by 2.7 times. Moreover, purchase milk prices were increased by 75% on average and pork and beef by 100%.
The Ministry of Agriculture believes that since the new regulation sets fixed purchase prices, while previously only their minimal values were regulated, the price growth will be under the projected levels. Therefore it is difficult to say to what extent purchase prices have been increased and what impact it will have on the consumer inflation, but we can safely assume that the governmental attempts to keep the inflation down to 2-3% per month during the summer-autumn period will be unsuccessful.
President Lukashenka has met with the head of Chechnya Ramzan Kadyrov, who visited Minsk and the Minsk Automobile Plant. Minsk has always sought to have independent links with Russian regional elites, partially, to compensate for the Kremlin's diminishing interest in Belarus. In recent years, Belarus’ contacts with the Russian regions have been extremely intense. However, with some leaders of Russian regions, primarily heads of large republics, communication was more difficult to build. As many analysts in Minsk suggested, Minsk could regard contacts between President Lukashenka and the head of Chechnya as an additional communication channel for relieving tension in relations with the Kremlin. However, most likely, a trusting relationship with Kadyrov is a value for Minsk as such, provided Kadyrov’s broad business and political interests, and a high degree of autonomy for the Chechen leader from the Kremlin.