Russian-style Express-shopping

April 22, 2016 18:26

On February 12th, Russia’s Deputy Prime Minister Dvorkovich visited Belarus.

Modernization plans and foreign debts payments require significant financial resources. Russia remains the only major potential creditor. Russia links loans to implementation of joint projects. Investors from other countries will be directly or indirectly limited by requirement to provide loans.

The State Programme for Belarus’ Industrial development until 2020 envisages, that the economy requires USD 10 billion annual net profit for industrial modernization. Belarus’ economy net proceeds in 2012 were USD 8.6 billion. Foreign investment is needed. In 2013 it is planned to attract USD 4.5 billion net FDI.

Economy Ministry compiled a list of 800 companies, which can be sold to domestic and foreign investors. The State Property Committee plans to make USD 5 billion from the sale of minority stakes in 103 enterprises, including Belaruskali, Naftan, GrodnoAzot.

The State budget cannot be used due to the high foreign debt payments: in 2013 the state has to pay off USD 3 billion. Russia can provide loans, but only for implementing joint projects.

On December 12th, Deputy Prime Minister of Russia Dvorkovich visited several companies in the country’s three regions. Formally, the countries are talking about joint ventures, but the example with Rosbelavto demonstrates that Russia will insist on having a controlling stake in joint ventures and will acquire shares needed control a company. It is planned to establish two joint ventures for the potash fertilizer production: one based on GrodnoAzot, and another joint venture based on Integral and Gomselmash. A signal of Belarus’ compliancy was closure of the issues regarding establishing of a joint trader Soyuzkaly – negotiations lasted for a long time.

In late February fulfillment by Belarus its commitments to the EurAsEC Anti-Crisis Fund will be considered. Privatization condition (USD 2.5 billion annually) was not fulfilled. Belarus has received a clear signal that failure to implement this condition will result in delays with the allocation of the loan’s next tranche – as it was with the 4th tranche.

An additional incentive for the government is the situation on the currency market. The fourth tranche was spent entirely to reimburse the outflow of foreign exchange reserves.

Thus, Dvorkovich’s visit has identified the “first round” companies, the management of which could be taken over by Russia through joint ventures. Belarus will still attempt to negotiate the price, but unlikely will be able to delay the privatization process indefinitely. In any case, negotiations on long-term project MAZ-KAMAZ are moving to their final stage, and the harmonization of the conditions to establish a joint venture Soyuzkali is almost complete. In the meanwhile, the deal with establishing a joint venture based on MKZT could be finalized sooner than others.

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Death penalty discussion in Belarus: yet not ready for either abolition or moratorium
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The Belarusian authorities have launched a discussion on the moratorium or abolition of the death penalty under the pressure of Belarusian human rights activists and international community. Apparently, the authorities are interested in monitoring public sentiments and response to the possible abolition of the capital punishment. The introduction of a moratorium on the death penalty would depend on the dynamics in Belarusian-European relations, efforts of the civil society organisations and Western capitals.

In Grodno last week, the possibility of abolishing the death penalty in Belarus or introducing a moratorium was discussed.

The Belarusian authorities are likely to continue to support the death penalty in Belarus. During his rule, President Lukashenka pardoned only one person, and courts sentenced to death more than 400 people since the early 1990s. Over the past year, Belarusian courts sentenced to death several persons and one person was executed.

There are no recent independent polls about people’s attitude about the death penalty in Belarus. Apparently, this issue is not a priority for the population. In many ways, public opinion about the abolition of the death penalty would depend on the tone of the state-owned media reports.

That said, the Belarusian Orthodox Church and the Roman-Catholic Church stand for the abolition of the capital punishment, however their efforts in this regard only limit to public statements about their stance. Simultaneously, the authorities could have influenced public opinion about the death penalty through a focused media campaign in the state media. As they did, for example, with the nuclear power plant construction in Astravets. Initially unpopular project of the NPP construction was broadly promoted in the state media, and eventually, according to independent pollsters, was accepted by most population.