Price setback

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April 22, 2016 17:52

While fighting against inflation and decreased incomes the government decided to address the consequences rather than the reason, generating additional economic problems. Administrative restrictions imposed on prices will lead to shortages, poor quality, poor range of goods and to the increased poverty of the population.

Petrol prices were cutback using administrative measures, paradoxically for the benefit of consumers of the most expensive types and of the owners of the most expensive cars. Usually less expensive diesel fuel leveled in price with the most expensive brands. Another piece of nonsense is that interests of the refinery, the main source of the foreign currency income, are neglected. Refineries were already operating at a loss in the first quarter of the year: they have foreign currency loans and they implement modernization programmes which take a significant part of the profit.

Government’s refusal to increase prices for utility services (electricity, heat, gas, waste, recycling, etc.) or transportation creates a cascade of new challenges for state monopolies, primarily for “Belenergo”, which has no foreign currency earnings, however needs it to pay for imported energy, maintenance, Chinese loans, etc. In previous years, “Belenergo” somehow made ends meet. Now the company rapidly accumulates debt. In the meanwhile, the government planned to restructure this industry and sell it to foreign investors, but who needs a generating capacity that operates with losses rather than profits?

The devaluation has already established a significant price advantage for domestic producers. They should take advantage and finally start selling a lot of Belarusian goods on the domestic market. Price restrictions will inevitably affect the quality of products, as companies will have to choose the cheapest raw materials. In Minsk and in other cities there is a shortage of some dairy products, bakeries start reducing variety, shops stop selling some goods fearing of possible sanctions for the high prices or inability to make a profit bearing in mind trade restrictions.

Another negative consequence of the current policy is that the residents of border areas of Russia are subsidized via active trade of Belarusian milk and meat products, petrol, etc.

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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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