Construction industry reform: Lukashenko’s pre-election project
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.
Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.
The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.
Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.
For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.
Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.
The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.