Belarus attempts to sell parliamentary elections to the West
Makey’s appointment as Foreign Minister means that Belarus will try to ’sell’ a liberalization illusion to the West in exchange for loans from international financial institutions. Makey and Prokopovich will be selling this illusion until there is a new beneficial framework for cooperation with Russia.
Staff reshuffle on August 20th, should, first of all, be interpreted as a measure to improve the search for foreign funding in the context of pre- and post-elections pressure on the Belarusian economy in general and on Belarusian ruble in particular. The Belarusian authorities have clearly lost their hope for the restoration of an adequate foreign currency income from Russia (about USD 2.5 billion in six months).
This implies, Belarus needs to consider either a large sale of state property (which is fairly complicated), or get new loans, or agree on refinancing of previous loans from international organizations (the IMF in particular). The recent staff reshuffle fits the bureaucratic system’s logic, i.e. that the local internal rearrangement should result in the anticipated external changes.
It is noteworthy that Makey’s dismissal as Presidential Administration Head has been long awaited. In fact, Makey failed as Head of Administration and after the December 19th events had lost President’s confidence significantly and, therefore, his weight in the administration. His resignation was deliberately coincided with the start of the active part of the election campaign - to indicate the possibility of changes in the Western policy, and to send a signal to the nomenclature about minor adjustments in the game’s rules.
In a wider perspective, the replacement of Sergei Tkachev as Presidential Aide on economy with Peter Prokopovich, as well as shifting Makey from the Presidential Administration to the Foreign Ministry aimed to update the authorities’ symbolic façade in order to facilitate negotiations with the IMF.
All this is meant as a fast and effective solution: to ‘sell’ the parliamentary elections with a view to resume negotiations with the IMF. At the same time, the authorities do not anticipate the recognition of the legitimacy of the Belarusian Parliament, for them the recognition of “progress” and “some democratization” in the electoral process in Belarus would be enough.
President Lukashenko had seriously restricted the room for maneuver in the upcoming negotiations. While introducing Makey and tasking him with normalizing the relations with the EU, he said, “We are ready to study hard and to learn everything new and advanced, and not only from them, but we want to do it without urges, threats or blackmail. Our people’s psychology is that you cannot make them jump through several development stages and turn out in “a happy democratic future”. These words need no further comments.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.