Stabilization loan: slow-motion negotiations continue
The next round of the Belarus-Russia talks on credit and financial cooperation was held on 11 April in Moscow.
During the meeting, the parties have identified measures, which could be implemented within the framework of the mid-term economic policy for Belarus, and also agreed to hold consultations between representatives of the Ministry of Finance and the National Bank of both countries in the Russian Finance Ministry starting on 14 April.
Russia delays the issuance of the stabilization loan to Belarus, forcing the country to accept certain conditions. Namely, unification of economic policies aimed at reducing amounts of subsidies, grants and use of other non-market instruments of economy stimulation, devaluation of the Belarusian ruble and privatization. Obviously, the positions and interests of both countries often differ radically. For instance, the Belarusian National Bank insists on senselessness of devaluation, while Russia considers it justified and offers to discuss it in numbers and speed rate. Belarus wishes to receive an “adequate” price proposal for its assets, while Russia proposes to make non-monetary exchange of shares (an exchange of assets within the holdings). Belarus is not ready to give up on credits and subsidies to state-owned enterprises to maintain high growth rates (which is almost never used in Russia).
At the same time, Russia could not but support the country it created the Union State with. Therefore, in the near future (April-May), Belarus will receive a $ 1 billion loan, while another $ 2 billion of stabilization loan in the framework of EurAsEC will be torpedoed by Russia.
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.