Customs Union does not protect Belarus from external shocks
Belarus’ reduced exports to Russia and urged devaluation in Kazakhstan imply that the Customs Union is unable to achieve its main goal – to support CU participants’ economies integrating into the global economy. Controversies among the participating states will not fade as they negotiate integration processes, led by Russia.
Last week, information about the preparation of the Eurasian Economic Union’s core documents was disseminated, which indicated the parties’ inability to overcome differences in approaches to economic integration. Russia insists on introducing common rules in trade and economic policy, and on harmonising technical standards, while Belarus wants to keep national technical standards to evade the common rules in the trade and financial policies. Moreover, Belarus does not agree with having a common economic policy.
Agreement on the Eurasian Economic Union is scheduled to be signed in May 2014, and it is becoming clear that this document will be just a declaration. Agreements on main substantial provisions will be postponed.
In addition, it is unlikely that the parties will be able to find a compromise. The first results of the economic integration’s ‘primary stage’, i.e. the Customs Union, have not inspired the participating countries. Most of all, this applies to Belarus. The benefits which Belarus has received within the Customs Union – preferential conditions for the supply of oil and gas – are insufficient to protect her economy from negative external influences and competition.
In 2013, Belarus lost her position on the Russian market regarding most commodities and accumulated a huge trade deficit (USD 5.8 bln). Belarus had to patch up the negative trade balance with loans and international reserves, which created additional pressure on the national currency. In addition, in early 2014, Belarus’ both partners in CU – Russia and Kazakhstan – devalued their national currencies, prompting her to depreciate the Belarusian ruble.
It is noteworthy that in a similar way, the Russo-Belarusian bilateral integration project – Union State of Belarus and Russia – the Customs Union predecessor, was unable to resolve the disputes between the parties. They were permanently postponed and have never been resolved. The irresolvable contradictions, rooted in opposite expectations from the Union State, had prompted Russia to offer a more ‘advanced’ integration project in a trilateral format.
Presumably, the existing contradictions and disagreements will not interfere with parties signing the agreement on the Eurasian Economic Union with great solemnity and minimal substance. Signing the agreement will not eliminate conflicts, trade wars or mutual accusations by the participating countries.
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.