USD 90 billion for the rescue of Belarusian industry
To create 400,000 high-performance workplaces and their modernization the government needs to find USD 90 billion. However closer analysis of the adopted Industrial Development Programme suggests that this project will not be fully implemented due to insufficient funding and conflicting objectives and actions.
A Belarusian Industry Development Programme till 2020 has been approved by the Council of Ministers’ regulation No 622 on July 5th, 2012.
Funding is the core of any project. Appendix 4, Programme’s Funding Sources divides funding sources into 4 groups. Apparently, projected funding from the national budget, as well as from enterprises’ own funds is realistic, while projected foreign investment volumes are not achievable. For instance, it is planned to attract USD 3 billion of FDIs in 2012. During the first half of 2012, the National Statistics Committee data says, only USD 150 million of investment in fixed assets has been attracted. The planned merger within “Rosbelavto” holding will not achieve the projected figures either.
The Programme declares geographic and commodity diversification of exports. In 2011 34% of Belarus’ exports were to Russia. Simultaneously, the Programme’s very first paragraph speaks about the intensification of economic relations with Russia in order to maintain traditional markets.
Commodity diversification involves changes in the share of mineral products exports from 36% in 2011 to 21% in 2020 mainly due to the increase in the share of machinery equipment and vehicles exports. It is assumed that “Belarusian Autoworks” will increase its share in the global market by one third and the shares of harvesters sales in the global market will grow by 50%. Apparently, these calculations are based on hopes that the world’s producers will give up their market shares without opposition to Belarus.
Thus, the industrial development plan in question looks rather like a sci-fi story, not a real action plan and for this reason will not be implemented in full. At the same time, some parts of the plan could nevertheless be implemented.
President Lukashenka has met with the head of Chechnya Ramzan Kadyrov, who visited Minsk and the Minsk Automobile Plant. Minsk has always sought to have independent links with Russian regional elites, partially, to compensate for the Kremlin's diminishing interest in Belarus. In recent years, Belarus’ contacts with the Russian regions have been extremely intense. However, with some leaders of Russian regions, primarily heads of large republics, communication was more difficult to build. As many analysts in Minsk suggested, Minsk could regard contacts between President Lukashenka and the head of Chechnya as an additional communication channel for relieving tension in relations with the Kremlin. However, most likely, a trusting relationship with Kadyrov is a value for Minsk as such, provided Kadyrov’s broad business and political interests, and a high degree of autonomy for the Chechen leader from the Kremlin.