7th Investment Forum confirmed the foreign investment plan’s unenforceability
The Investment Forum, held in Minsk on November 15th – 16th did not result in a significant number of investment agreements. Investors are not interested in declarative statements and the situation with “Spartak” and “KOMMUNARKA” describes the private property situation in Belarus better than words.
On November 15th -16th, 2012 Minsk hosted 7th Belarusian Investment Forum.
There are supporters of foreign investments among the Belarusian officials. The National Agency for Investment and Development has been set up. Substantial benefits are provided to those who set business in small towns (decree No 6 of May 7th, 2012). Belarus has improved its rating in “Doingbusiness-2013”. Frameworks for the production activity in the Sino-Belarusian Industrial Park have been identified.
Some investment projects were presented during the Investment Forum. There were 600 Forum participants. However, only 12 agreements with insignificant amounts came as Forms’ results, which indicates business’ suspicion after “Spartak” and “KOMMUNARKA” were de facto nationalized. Even the attractive conditions in small towns have not made businesses excited about active investment in Belarusian economy.
Looking at a bigger picture, Belarus has not been successful in attracting investment: the 2012 plan, envisaging sales of state assets worth USD 2.5 billion, failed. Belarus’s attempts to sell MTS shares were unsuccessful. Establishment of a joint holding “Rosbelavto” is hampered for political reasons.
The reasons behind each failed ‘investment case’ vary, but in the end, Belarus’ very modest success with attracting investment is due to excessive control over commercial activity of enterprises, on the one hand, and leadership’s high expectations from investors, on the other hand. Indirect discussions between the President and the Prime Minister during the Forum demonstrated that in the end, it would be the President who would make the final investment decision regardless of the government’s position.
Thus, even if reduced to USD 2 billion, 2013 investment plan without high level support is yet another declaration of intent not supported by real projects. Potential large investors are well aware of peculiarities of investing in Belarus and prefer to invest in countries with a more predictable investment climate. Belarus therefore can only hope for investors willing to take risks, but they, as a rule, do not invest in long-term projects.
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.