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Struggle for dwindling public resources exacerbated in Belarusian banking sector

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August 17, 2016 11:30

The fight for dwindling public resources has exacerbated among various nomenclature groups, leading to stepped up anti-corruption prosecution in the banking sector. Most likely, the power block seeks to emphasise its role in ensuring economic stability in Belarus and counterweight the role of liberals from the financial sector who gained influence in the past couple of years. The top leadership is likely to balance out the influence of technocrats from financial institutions with the interests of the power block.

Last week, law enforcement officers detained several top managers of the largest bank in Belarus.

Regardless of their high positions, bankers, who were detained by the security forces, belonged to the second layer of management in the Belarusian banking system. Their detention is unlikely to have a substantial impact on the banking sphere, neither inside, nor outside the country and on the image of the Belarusian banking system for foreign partners

Belarusbank operates many public programmes and allocates substantial financial resources, including concessional lending. One of the most probable reasons for the criminal prosecution of the banks’ top managers could be the struggle for redistribution of dwindling public resources among nomenclature groups.

Belarusbank’s leadership was often critical of the current policy aiming to support outdated state-owned enterprises with inefficient management. Bankers proposed to revise investment projects’ efficiency and approaches to production modernisation in terms of improving management quality, economic liberalisation and stepping up private business’ role.

Perhaps, the bank’s management attracted the attention of the law enforcement, when Belarusbank owners proposed to Lukashenka to sell part of the banks’ shares. The president is very sensitive about selling state assets to private owners. That said, Belarusbank occupies almost half of the Belarusian banking market.

The power block has once again proved useful to the president in ensuring financial discipline in the banking sector.

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Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.

Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.

In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.

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