The piling stocks problem is to be solved through trade
The draft law on state regulation of trade will allow local authorities to intervene in commodity markets, including illiquid products.
Fulfillment of government’s industrial production plans results in piling stocks at warehouses. The government intends to force the illiquid goods trade. If this approach is legalized, enterprises will be able to improve their reporting indices and industries will partially share the overproduction costs with the trading companies.
Since early 2013 the country’s stocks increased by 33.7% or by BYR 7.5 trillion, making it BYR 29.7 trillion. One of the main reasons behind growing stocks is the quantitative reporting in the goods production, regardless of the current economic situation. Some enterprises did not sell their products and were sending them to warehouses. Industrial production parameters have been adjusted to show better performance, while industries put pressure on local authorities to assist in the sales of illiquid products they have produced.
The draft law “On state regulation of retail and food service in the Republic of Belarus” contains a paragraph, allowing for broad interpretations and permitting the local governments to force retailers to sell goods regardless of the demand. Additional effect from these regulations would be the temporarily reduced stocks due to their transfer to the retail and wholesale trade.
In the regions, this mechanism is already at work. If legalized, these practices will become more widespread in trying to fight the piling stocks at warehouses. The established modus operandi is economically inefficient: overstated industrial production – stocks’ growth – administrative means to clear warehouses. In the end, trade will be the one to blame.
Instead of improving retailer’s efficiency to supply popular goods or adjusting production plans to produce more high-liquidity goods, the government is using a mechanism, which aims to meet the GDP growth targets using any means, even to the detriment of the financial situation in industry and trade.
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.