Aliyev's visit marked the end of Venezuelan oil supply project
During the visit, many agreements on cooperation between the two countries were signed. However, their insignificance and the low foreign trade level between the two countries suggests, that the main purpose of the visit was to close the biggest deal between the two countries in recent years: cooperation on oil supply using swap schemes.
On August 28-29, Azeri President Ilham Aliyev visited Belarus and met with Alexander Lukashenko.
There is a broad list of agreements signed during the visit, but the most important is the inter-governmental agreement on the creation of favorable conditions for the leasing expansion. The remaining agreements are mostly formal and could be signed by other high level officials. A statement about joint export to third countries is not more than a declaration of intent. 94.5% of Azerbaijan’s export (USD 26.6 billion) is energy products. Azerbaijan hardly needs assistance of Belarus to export its gas.
It would be difficult to maintain upwards dynamics in foreign trade. Excluding oil supply, in 2011 imports from Azerbaijan totaled USD 9.3 million; in 2012 Azeri oil supplies have been suspended and imports were worth about USD 6 million in the first five months. Exports from Belarus to Azerbaijan increase, but even overcoming the USD 200 million threshold will not help keeping up the bilateral trade volume achieved in 2011.
Currently further cooperation using swap schemes is impossible. Venezuelan oil price is well above the price of Russian oil in 2012. Capacity of Belarusian refineries reached 100% and there is no economic feasibility for oil supplies using a difficult route. Moreover, experts raised many questions regarding oil supplies using swap agreements due to the supplies’ inarticulate logistics. Tankers demurrage and Azeri oil shipping via suboptimal routes significantly undermined the deals’ economy.
Therefore the visit of Ilham Aliyev probably marked the end of multilateral cooperation on oil supplies. Recent visit of President Lukashenko to Venezuela in a way ended one part of the deal, and the visit of the President of Azerbaijan put an end to the entire project.
Amid budgetary cuts on social protection, the Belarusian public sector is experiencing a management crisis and a balance shift in the state resource redistribution system. The authorities are forced to revise their most unpopular decisions during the implementation due to the pressure from affected social groups. The state is unlikely to oppose to some civil society and opposition organisations in strengthening their role in society in order to retain touch with the population and to be able to respond to the most harsh criticism of state initiatives.
The Architecture and Construction Ministry has acknowledged that the decree No 585 on assistance to large and young families in building and buying housing was prematurely rescinded.
The authorities are often forced to revise their decisions on curtailing social assistance to different social groups during their implementation, without preliminary impact assessment and feedback from the population, so as they lead to the growth in social tension. Due to the centralised decision making, languishing state resources and the lack of public debate as a balancing instrument in issues related to social protection, the state administration is losing control of the population.
Perhaps, the compensatory mechanisms of the state apparatus lack the time to adjust to dwindling state resources for supporting the existing social model, even in a reduced form. The authorities have completely or partially paralysed operations of independent public institutions and representative bodies, through which they could monitor public moods and receive feedback from the population, such as local councils, the parliament, political parties and NGOs. Last year, under the pressure of the authorities, the last independent institute for measuring public sentiment, IISEPS, suspended operations.
President Lukashenka’s self-removal from the decision-making on current socio-economic issues, also could have affected the state apparatus’ operations. The president has always been very sensitive about adopting unpopular decisions which could lower his popular support, hence demanded a careful preliminary assessment of such decisions. However, recently, especially after the introduction of the tax on social dependants, the president has mainly focused on the foreign policy agenda.
Hence, a lacuna has formed in the state decision-making after the president reduced participation in the current socio-economic policy formation, which leads to an increase in manifestations of dysfunction in the public administration.