Security forces gain more influence on redistribution of languishing state resources
Amid weakening influence of large businessmen from the president’s inner circle, the security forces have enhanced their positions. In all likelihood, the government has decided to redistribute increasingly scarce resources and strip businesses of some profits nesting on public resources. As the economic situation deteriorates, the competition for resources is likely to increase along with the influence of security bodies.
Last week, at a briefing, KGB Chairman Valery Vakulchik said that further criminal inquiries and arrests were to come.
Amid several devaluations, economic recession and languishing public resources, business environment in Belarus has deteriorated, which has bolstered withdrawal of capital from the country. In all likelihood, redistribution of increasingly scarce resources may affect the president’s inner circle. And security forces are likely to play a major role in such a redistribution.
Security forces have somewhat lost their influence as Belarus engaged in normalization of relations with the EU. According to some analysts, the MFA’s weight has been growing consistently. Despite occasional tough actions against journalists, a more systematic attempt to disrupt the Belarusian-European relations could end in dismissals in the law enforcement leadership.
Nevertheless, the law enforcement is beginning to recover its lost positions. Instead of fighting against the possible "colour revolution" and persecuting the opposition, the security forces have focused on tracing financial flows and engaged in the redistribution of public resources.
Some analysts believe, that detention of businessman Yuri Chizh was the KGB’s independent initiative. According to them, head of ‘Triple’ holding Yuri Chizh was not a member of the inner circle, requiring the security forces to obtain the president’s consent for prosecution, which is unlikely.
Most likely, the KGB head provided President Lukashenka with evidence that Yuri Chizh had attempted to transfer his assets abroad and had a plan to move his businesses to a more favourable environment in Lithuania or Poland. KGB Chairman Vakulchik revealed some details about the detention of the disgraced businessman, who was attempting to escape from the country at 220 km per hour, which, incidentally, could be a figurative statement, "an ‘Interception’ plan was applied. He was driving firstly to the west towards the Lithuanian border, then towards the Brest highway”.
That said, last year’s detention of Yuri Chizh’s close business partner, Yaprintsev, who was well aware of all ‘Triple’ affairs, could have indeed been a signal to Chizh to accelerate withdrawal of his capital.
Recently, the Belarusian security forces have held several arrests of large businessman and more are likely to come. In addition, status and belonging to the highest echelons of power are no longer guarantees against prosecution in Belarus.
In October 2015, the third member of the Council of the Republic, the owner of Biokom company, Andrei Pavlovsky, was stripped of parliamentary immunity. However, within a month, he was released and recently pardonedby President Lukashenka after repaying USD 20 million to the state. In addition, media reported about the detention of yet another major businessman, the owner of Servolux group of companies, Evgeny Baskin.
Apparently, the law enforcement agencies have received the green light to reshuffle all large and medium-sized businesses, which nests on public resources. The security agents are likely to have sufficient information to strip most businesses of ‘excessive’ revenues.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.