Belarusian authorities ready for some pluralism but not for long-term structural reforms

The dialogue between the Belarusian authorities and business, independent and international economic experts about economic reforms allows softening criticism and creates favourable environment for negotiations with international creditors. The Belarusian leadership is not ready for structural reforms and reduced role of the state in the economy, however it is ready for changes in the most troublesome areas, including ensuring financial stability, improving the efficiency of state-owned enterprises and housing and utility services. In the medium term, supporters of reforms in the Belarusian government are likely to participate in public events, hold talks with international lenders, but unlikely to have any real impact on Belarusian economic policies.

Last week, Minsk hosted the fourth October Economic Forum KEF-2016.

The Belarusian authorities are sending mixed signals with regard to the economic policy reform. While negotiating with international creditors and business, Minsk underscores its commitment to carrying out structural economic reforms. However, when appealing to the population, the Belarusian top management declares a commitment to preserve Lukashenka’s economic model. Apparently, the Belarusian authorities attempt a traditional manoeuvre and would carry out some stretched in time transformations in some economic sectors, while preserving the leading role of the state in the economy. The Belarusian authorities’ main task is to preserve socio-political stability and ratings of government institutions.

Belarusian society has no positive expectations from reforms and changes to the existing economic model, which is based on the state ownership. The opposition and civil society organisations have introduced some new instruments for the population to protect their interests while carrying out reforms, however these instruments are insufficient to prompt the state bodies to take action, which could lead to broader economic policy adjustments.

The Belarusian leadership has enabled some pluralism in the state apparatus and greater visibility for supporters of market reforms. In addition, it may somewhat adjust the state policy to meet the interests of some groups and in order to mitigate pressure from business, independent experts and international creditors. However, authorities hope to retain control over the state policy without making major changes to its core.