Construction industry reform: Lukashenko’s pre-election project

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April 22, 2016 18:34

On July 26th, President Lukashenko spoke about country’s construction industry development.

The ruling group tightens control over economy’s priority areas, the construction industry in particular. In authorities’ view, stronger monopoly in this field will reduce political and economic risks before the next presidential election.

Lukashenko spoke about construction industry reform. He said that the government will put more restrictions on private developers and will focus on large state-owned construction companies. The statement was made against the background of mass-scale inspections in the construction industry, carried out by the Presidential Administration.

The construction industry reform envisages strengthening the state’s positions in this field. In particular, discussions are ongoing about merging into a single holding all district construction contractors in Minsk. If implemented, all nine district administration offices for capital construction in Minsk will merge into one organization with a consolidated budget. For example, in 2013 the overall budget of all nine construction administrations in Minsk is BYR 970 billion rubles, or circa USD 110 million.

Also, gradually denying contracts to private construction companies and contracting state-owned will result in state contractors’ consolidation under the state’s supervision. Such monopolization of the industry will enable the ruling group not only to tighten control over greater budgets, but also to reduce the risks for politically important housing construction projects in the view of the upcoming presidential elections in 2015.

In Q1 and Q2 2013 housing construction plan was fulfilled only by 40.3%. All in all, 2.62 million housing square meters were commissioned out of projected 6.5 million. It seems that the ruling group aims at fulfilling the ‘plan’ by scarifying private construction companies’ interests in order to accelerate the residential construction pace.

In addition, the President’s Administration bears in mind the 2015 presidential election, which is why they make very ambitious housing construction plans – in 2014 it is planned to commission 8.5 million square metres and in 2015 - 9.5 million. This could become an important part of the future election campaign for candidate Aleksandr Lukashenko.

Finally, construction industry in Belarus has conventionally been regarded as a driver for the economy and the key to managing the economy. This stereotype is also supported by the endeavors of former National Bank Head and former adviser to the President on economic matters and acting Deputy Prime Minister Petr Prokopovich, who enjoys President’s loyalty in economic policy matters.

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President Lukashenka continues to rotate staff and rejuvenate heads of departments and universities following new appointments in regional administrations. Apparently, new Information Minister Karliukevich could somewhat relax the state policy towards the independent media and introduce technological solutions for retaining control over Belarus’ information space. New rectors could strengthen the trend for soft Belarusization in the regions and tighten the disciplinary and ideological control over the student movement in the capital.

President Lukashenka has appointed new ministers of culture and information, the new rector of the Belarusian State University and heads of three universities, assistants in the Minsk and Vitebsk regions.

The new Information Minister Karliukevich is likely to avoid controversial initiatives similar to those former Minister Ananich was famous for, however, certainly within his capacities. Nevertheless, the appointment of Belarusian-speaking writer Karliukevich could be regarded as the state’s cautious attempt to relax environment in the media field and ensure the sovereignty of national media.

The Belarusian leadership has consolidated the trend for mild Belarusization by appointing a young historian and a ‘reasonable nationalist’, Duk as the rector at the Kuleshov State University in Mogilev. Meanwhile, while choosing the head of the Belarusian State University, the president apparently had in mind the strengthening of the ideological loyalty among the teaching staff and students at the main university in order to keep the youth movement at bay. Previously, Korol was the rector of the Kupala State University in Grodno, where he held purges among the disloyal teaching staff.

The trend for the renewal of mid-ranking executives and their rejuvenation has confirmed. The age of the Culture Minister and three new rectors varies from 39 to 44 years old.