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Minsk disregards alarming increase in credit dependence on Kremlin

August 28, 2017 12:00
Image: How To Exit The Matrix

Minsk continues to strengthen its credit and financial dependence on the Kremlin, which could reach critical levels in coming years and cause difficulties in discharging of obligations. The Russian leadership is likely to refrain from dictatorship for the period of the electoral campaign in Russia. However, the weighty credit debt to Moscow would enhance Minsk’s vulnerability to political and economic pressure from the Kremlin after the presidential elections in Russia.

So far, the Russian Government has approved only the draft loan agreement, and its allocation could be delayed and conditioned with concessions from Minsk. An increase in the debt to Moscow up to critical levels could prompt the Belarusian leadership to privatise state enterprises appealing to Russian business (as it was in the case of Beltransgaz in 2007-2011).

The Kremlin has embraced the Chinese experience and is consistently offering to Minsk investment and loans tied to additional commitments. For example, Moscow has granted Minsk a USD 10 billion loan for the construction the Nuclear Power Plant in Ostrovets by Rosatom. In addition, Russian lobbyists insist on changing export routes for Belarusian oil products from Russian raw materials from the ports of Lithuania, Latvia and Ukraine to Russian terminals in Ust-Luga and St. Petersburg.

Until now, Russia has allocated about USD 2.5 billion to the Belarussian government for the construction of the NPP, but by the time the nuclear facility in Ostrovets would be completed in 2020, Belarus’ debt would increase to USD 10 billion. Due to the growing debt on loans, the Kremlin would make Minsk critically dependent on it and create favourable environment for imposing its political and economic interests onto the Belarusian leadership, including the joint exploitation of the NPP or electricity export.

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The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.

Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.

Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.

In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.