Worsening of financial statistics in the real sector
By 1 May 2011 accounts payable amounted to Br 66.3 trillion, compared with 1 May 2010 they increased by 38.2%, while consumer prices grew by 18.1% during this period.
Between January and April 909 organizations were at a loss. Net losses of unprofitable organizations in January-April 2011 amounted to Br 1 trillion, or increased by 44.3% in January-April 2010.
As of 1 June 2011 stocks of finished products at industrial enterprises in Belarus amounted to Br 7578.6 billion, and increased by 51% from the beginning of the year.
Volume of stocks has been rising continuously since the beginning of the year: in May by 10.5%, by 2% in April, by 1.9% in March, by 7.9% in February and by 21.8% in January.
The real sector cannot stay away from the unfolding crisis. Further reduction in income, growth of loans interest rates, the need to pay back foreign currency loans, all these and other factors contribute to the increased debts and loss-making of enterprises.
Moreover, the government’s efforts to stabilize inflation by putting administrative constraints on prices will lead to even greater imbalances. Many of the industrial, energy companies used foreign currency loans within the framework of modernization programs. The impossibility of their service will rebound to the banks. In order to avoid bankruptcy the government subsidizes state-owned enterprises from the budget funds (which is currently difficult), as well as enhances overall redistributive processes.
All these measures are contrary to the requirements set by Russia and the IMF in their reform programmes.
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.