President attempts to improve governments work by threatening to dissolve it
The Belarusian authorities have no plans to readjust economic policies and pursue structural economic reforms before the presidential elections in 2015. In accordance with the existing practices, the president will attempt to use administrative means (including threats to dissolve the government) to improve the state apparatus’s performance in meeting the projected indicators and eliminating economic imbalances.
Last week, the Government and the National Bank debriefed President Lukashenko about economic performance in 2014 and forecast for 2015.
At the meeting, the president, criticised the government and raised the issue of reshuffle. The President underscored that he was unhappy with the Council of Ministers: “Am I supposed to say, ’Well done, do it?’ Given that this year has been a failure, where are the guarantees that the next one will be a success? I already have no confidence in what you say. In general, I mistrust the government”.
Lukashenko has repeatedly expressed his dissatisfaction with the government headed by Myasnikovich and promised to consider his resignation. Yet there were no major reshuffles, except some staff rotations in some ministries and government bodies. For example, in early October, the new Finance Minister was appointed (Vladimir Amarin), and the new head of the Minsk Executive Committee (Shorets). It is clear that the president is not interested in the government’s resignation before the presidential campaign starts. Such a move would have negatively affected the economic expectations of the population, including destabilising the shaky currency market situation.
The president is more concerned about fundraising to support the economy in 2015, than about the personnel issues. At the meeting he said it was important to maintain the current import substitution policy and protect domestic producers, “If we can produce machine-tool in Belarus, [enterprises] should be equipped with Belarusian machine-tools. References to that we liabilities in the Customs Union, the Eurasian Union and so on shall not be accepted. Own producers should be protected”.
Simultaneously, the Belarusian authorities are stepping up efforts to attract foreign investors, promising not only optimal conditions for investment, but also structural economic reforms. This, in particular, Economy Minister Nikolai Snapkou said at the second "October Economic Forum" in Minsk with the participation of managing director and chief economist of the Moody’s Investors Service Lucio Vinhas de Souza.
In addition, at the Belarusian Investment Forum in London Nikolai Snapkou announced a pilot privatisation project with the participation of the World Bank, and the Deputy Finance Minister Ermolovich announced the new issue of Eurobonds by Belarus worth circa USD 1 billion (with 10-year maturity period).
Also, the Belarusian authorities want the West to lift sanctions against some public officials. In London, the First Deputy Foreign Minister Alexander Mihnevich downplayed the negative effects from the EU sanctions policy on the investment climate in the country, “I would like to debunk a myth about Belarus under sanctions for the investors. There are no sanctions! There is a group of people - about 200 individuals, who are restricted from entering the European Union. Come to Minsk and meet them there, meet them in the UAE or other countries. But not in Europe. Well, that’s the way it is. Nothing is scary about that”.
Meanwhile, talks about structural economic reforms will remain empty at least until the presidential elections in Belarus. The authorities will try to meet the projected performance indicators by using traditional means, such as strengthening discipline of the executives. For instance, as of 2015, the new regulation will take effect, which outlines the rights and responsibilities of the executives (in private and state enterprises).
Before the presidential campaign in 2015, some personnel rotations in the public service are quite possible, however, the Government headed by PM Myasnikovich will not be dissolved.
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.