Kremlin strengthens "privatization" pressure on Minsk

Category status:
April 22, 2016 18:54

Belarus attempts to delay privatization of her large state-owned assets in favour of Russian business, aspiring to buy some time with keeping Russo-Belarusian relations tense. The Belarusian government uses this tactics by playing on contradicting interests of large influential groups in President Putin and Prime Minister Medvedev’s teams. However, Belarus’ growing dependence on the Kremlin significantly limits her abilities to manoeuvre and eventually she will be prompted to hand over state assets to Russian counterparts.

On July 15th, President Lukashenko met with Russia’s Deputy Prime Minister Arkady Dvorkovich.

Belarusian official media reported that Russia’s Deputy Prime Minister Dvorkovich visited Minsk primarily to discuss Eurasian integration issues. Interestingly, Dvorkovich’s visit to Minsk had not been announced in advance and took place after a telephone conversation between President Lukashenko and Prime Minister Medvedev “following the request from the latter”.

During the meeting Deputy Prime Minister Dvorkovich "conveyed greetings" from President Putin to President Lukashenko. It should be noted that only two weeks earlier Lukashenko and Putin met in Minsk, and that right after the meeting Belarus received a USD 2 billion loan from the Russian VTB Bank. These funds have prevented Belarus’ international reserves from falling below the level of USD 4.4 billion, or 1.1 months worth of imports – a critical marker for the national currency’s stability.

Deputy Prime Minister and member of the Russian Government’s Presidium, Dvorkovich is an important figure Dmitry Medvedev’s team. He oversees real economy, including fuel and energy complex. He carried out several successful privatization projects in Russia. In February 2013, after Dvorkovich’s visit to Minsk Belarus named five major Belarusian companies for privatisation in favour of Russian capital. Russians are interested in purchasing the following assets: MAZ, "Integral", Minsk Wheel Tractor Plant (MWTP), “Pelenga”, and "Grodno Azot”. In May 2014, during the World Ice Hockey Championships, Dvorkovich visited Belarus privately and looked at attractive assets in Belarusian state property.

During the most recent meeting with Dvorkovich, Belarus’ Prime Minister Mikhail Myasnikovich said, “I know, that today during a meeting with Belarus’ President they discussed the following steps in the major integration projects. The Government, in turn, will do everything in order to meet the deadlines”. However, Belarus had failed the ‘deadlines’ before (the most recent was in late 2013) and was able to crumb the Kremlin’s ‘integration’ plans of transferring Belarusian assets to Russian companies.

It is likely, that the Belarus’ officials in their traditional manner attempt to play on Russia’s internal contradictions. Last week, Belneftekhim Head, a Russian citizen Ivan Zhilin was suddenly arrested – regardless of the concern’s good performance in the last six months. In addition, in May this year, Prime Minister Medvedev announced redistribution of power in the Russian Government. Partially, Dvorkovich might be stripped of his powers in favour of Deputy Prime Minister Khloponin (most likely those associated with fuel and energy complex). However, this is unlikely to affect significantly the Belarusian-Russian relations as regards “integration” projects.

Belarus’ growing dependence on foreign aid (mainly from Russia) is likely to prompt officials in Minsk to yield to the Kremlin’s pressure regarding privatization of some large state assets before late 2014. 

Similar articles

Minsk attempts to make up for image losses from military exercises by opening to Western values
October 02, 2017 11:49

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.