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.
President Lukashenka continues to rotate staff and rejuvenate heads of departments and universities following new appointments in regional administrations. Apparently, new Information Minister Karliukevich could somewhat relax the state policy towards the independent media and introduce technological solutions for retaining control over Belarus’ information space. New rectors could strengthen the trend for soft Belarusization in the regions and tighten the disciplinary and ideological control over the student movement in the capital.
President Lukashenka has appointed new ministers of culture and information, the new rector of the Belarusian State University and heads of three universities, assistants in the Minsk and Vitebsk regions.
The new Information Minister Karliukevich is likely to avoid controversial initiatives similar to those former Minister Ananich was famous for, however, certainly within his capacities. Nevertheless, the appointment of Belarusian-speaking writer Karliukevich could be regarded as the state’s cautious attempt to relax environment in the media field and ensure the sovereignty of national media.
The Belarusian leadership has consolidated the trend for mild Belarusization by appointing a young historian and a ‘reasonable nationalist’, Duk as the rector at the Kuleshov State University in Mogilev. Meanwhile, while choosing the head of the Belarusian State University, the president apparently had in mind the strengthening of the ideological loyalty among the teaching staff and students at the main university in order to keep the youth movement at bay. Previously, Korol was the rector of the Kupala State University in Grodno, where he held purges among the disloyal teaching staff.
The trend for the renewal of mid-ranking executives and their rejuvenation has confirmed. The age of the Culture Minister and three new rectors varies from 39 to 44 years old.