Immediate future of Belarus-EU “dialogue”
Alexander Lukashenko sees no immediate need in a dialogue with the West however he is planning to release all political prisoners and to negotiate the approval of the IMF loan with the US and EU to survive until the New Year.
He has no further plans therefore as soon as he receives the loan (at least USD 1.5 billion), his “geopolitical” and “liberal/repressive" moods will swing in the opposite direction.
Last week’s public appearances of Alexander Lukashenko spotlighted his vision of the situation and his plans and expectations vis-?-vis the West. Lukashenko hopes that:
- references to threats from Russia,
- release of political prisoners,
- a round table between representatives of quangos and the opposition,
- introduction of a supplementary session on the Belarusian Currency and Stock Exchange
would be sufficient for the approval of the IMF loan for Belarus by the EU and the USA.
The Head of state, nevertheless, is not interested in a dialogue with the West as he has no idea (except for cancellation of visa restrictions) what to expect from it. However he would like to mitigate the political climate in the relations with the West, in the first place, to continue bargaining with Moscow for fringe benefits, and secondly, in order to expand opportunities for international lending to the Belarusian economy.
He unequivocally declared that he was not interested in political and real economic transformations. His advisors believe that transformations would further undermine his authority, which is not in the best shape at the moment. Lukashenko also sees no reason for real transformations, as it would weaken his position domestically, while benefits are hypothetical by nature.
Therefore he is not even trying to imitate transformations, he relies purely on the imagination of European politicians and the opposition, hoping that sacred words “dialogue”, “round table”, “rapprochement”, “privatization”, etc will trigger a chain of associations and will be perceived as a starter pistol. If there are no counter-proposals, he will send a behind the scenes hint inviting for couloirs negotiations via his security forces and ideology workers.
According to estimates of the ruling group, about USD 1-1.5 billion is needed in order to keep going before the sale of Beltransgaz to Gazprom and a new round of negotiations with Russia. The authorities have high expectations regarding these talks and their success is conditioned inter alia by the “European” stake however the main goal is to move to the next phase of the Customs Union. That is why there is “time pressure”, the money is needed now otherwise the National Bank will not be able to intervene at the supplementary session.
The country's leadership has instructed the local authorities to raise minimum wages at enterprises by the end of 2019 to BYN 1,000, which would lead to an increase in the average wage in the economy as a whole to BYN 1 500. The pace of wage growth in 2017 is insufficient to ensure payroll at BYN 1000 by late 2017 without manipulating statistical indicators. In order to fulfil the president’s order, the government would have to increase budgetary expenditures on wages in healthcare and education, enterprises – to carry out further layoffs and expand the practice of taking loans to pay wages and restrict investment in modernisation of fixed assets. In 2010, the artificial increase in wages led to a threefold devaluation in 2011, an increase in the average salary to BYN 1500 will not match the capabilities of the economy and would lead to yet another devaluation.