Belarus’ authorities step up cooperation with Russian regions
Traditionally, the Belarusian authorities use Russia’s regional elite’s sympathy towards President Lukashenko to lobby their interests in the Kremlin. President Lukashenko has close ties with the heads of Russian provinces, which helps him to ensure their loyalty, regardless of the state of affairs with the Kremlin. The Belarusian government attempts to hedge against the risk of tensions between Russia and Belarus ahead of the 2015 presidential campaign by increasing its contacts with Russian provinces.
On June 5th, President Lukashenko met with the Speaker of Federation Council (upper house of the Russian federal parliament) Valentina Matvienko and Russia’s regional heads.
The First Forum of Belarusian and Russian Provinces, held in Minsk on June 5th, was devoted to cooperation on agriculture between Belarusian and Russian regions. The Speaker of the Russia’s Federation Council, Valentina Matvienko and more than 200 representatives of 19 Russian provinces attended the Forum. The Forum was not attended by representatives of Kazakh regions, despite the Eurasian Economic Community founding treaty, signed by Belarus, Russia and Kazakhstan in late May.
Interestingly, the Belarusian authorities succeeded in establishing favourable economic cooperation with Russian regions. Despite periodic trade wars initiated by Moscow, Russian provinces are interested in Belarusian producers and businesses increasing their presence. For example, Smolensk province head, Mr. Ostrozhski requested “assistance in farming cross-border lands by Belarusian specialists”. In addition, Russia lists more than 1,000 organizations with Belarusian capital and 58 co-productions of Belarusian equipment.
At the Forum, President Lukashenko talked about the difficulties he encountered during the EaEU’s creation and blamed them on Moscow: “we have declared that the union will be formed without any exemptions and limitations. At least, in economic terms, it should have been one state. But when we got down to the issues, it appeared that some problems have become massive. Well, it’s no secret – primarily for the Russian Federation. Therefore, on some issues, we even made steps back from the Customs Union”.
Ahead of the presidential elections in Belarus in 2010, the Kremlin initiated an information war against President Lukashenko. As a result, President Lukashenko was prompted to make several significant concessions and signed the documents to create a single economic space with Russia without any significant moves by Moscow towards Belarus. Belarus’ president emphasised the importance of close ties with Russian regions in order to build relations with the Kremlin: “In our relations with Russia, we had difficult times, and if there was no cooperation with Russian regions we would have serious difficulties today”.
Also, President Lukashenko talked about the need to de-escalate the Russo-Ukrainian conflict: “The new president was elected in Ukraine. I think we will work with the new president, with the new government, because our people live there, people like us - kind, hard working - but who found themselves in this situation. Of course, we can forget about them, but people will suffer even more”.
In the lead-up to the 2015 presidential elections, the Belarusian authorities seek to increase the level of contacts with the Russian regions. The Belarusian president hopes that close ties with the Russian regional elite will mitigate the Kremlin’s pressure during the election campaign.
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.