Military industrial complex outlook as a bridge between Russia and Belarus
Enhanced cooperation with Russia in the military sphere reinforces a safety cushion for a number of Belarusian companies by enabling them to take part in state procurement orders. Simultaneously, the cooperation programme’s ambiguity will push Belarus to seek additional funding opportunities, not necessarily in Russia.
In Minsk on October 23rd, Belarusian First Deputy Prime Minister Vladimir Semashko and Russian Deputy Prime Minister Dmitry Rogozin signed an action plan to intensify cooperation between the defense industrial complexes of the two countries for 2012-2015.
The signed document is a framework agreement, but the tone of statements by vice premier Rogozin implied that Russia has not abandoned attempts to acquire some Belarusian industrial assets. In particular, during the visit, two companies were named: “Integral” (computer technology) and MAZ (engineering), however the details and additional conditions for cooperation between these companies have not been disclosed. It is a known fact, that talks about MAZ and KAMAZ merger are ongoing.
In turn, Belarusian Prime Minister Myasnikovich expressed a desire to eliminate all restrictions still in force for a number of Belarusian industries within the Customs Union and the Common Economic Space. It should be noted that this request is not in Rogozin’s competence: he is in charge of the military-industrial complex and military-technical cooperation.
Thus, the political outcome of Rogozin’s visit to Minsk was the shaping of yet another link between Minsk and Moscow, in the security sphere and military-technical cooperation. However, the failure to address specific issues, i.e. the volume of financial support or compensation to the Belarusian defense industry and corresponding industrial enterprises – is most likely to cause Minsk to look for additional support. Therefore it is still possible that cooperation with the West will be enhanced, if Russia does not offer Belarus a profitable continuation of the project in question.
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.