Centralization remains the main method of economic management

Category status:
April 22, 2016 18:36

President Lukashenko approved the establishment of the ‘Belarusian Cement Corporation’ group in Mogilev on August 16

Reinforced state control is still the priority method of economic policy for the ruling group. ‘Liberal’ amendments to the legislation in practice do not increase the impact of business yet of law enforcement agencies.

Still, stronger position of the state and increased control over business meant to boost state budget revenues is still the main economic strategy of the ruling group. The revenues are expected to rise either from growing tax returns, or due to privatisation of the part of the enlarged company.

In particular, it is expected that the establishment of the ‘Belarusian Cement Corporation’ group on the basis of three companies (Belarusian cement plant JSC, ‘Krasnoselskstroymaterialy’ and ‘Krichevtsementnoshifer’ JSC) will double cement production up to 10 million tons per year by 2015 (4.9 million tons were produced in 2012 in the Republic of Belarus). The authors of the new holding group project don’t rule out the possibility of selling of the share in it to some ‘strategic investor’. The details of the possible sale of the still non-existent company are not disclosed yet, which indicates that the statement is of advertising nature.

At the same time the President called for elimination of intermediaries in the supply of raw materials and components for cement production, including criminal prosecution of companies’ managers found guilty of the excessive use of intermediaries. Thus, the subordinates of the president are given ‘the green light’ for complete reorganisation of the cement industry under the state control. These actions of the ruling group are fully in line with the tendency to strengthen the role of the state in economy: in confectionery, woodworking, meat and dairy industries, observed over the past year.

In this regard, the meeting on the liberalisation of criminal and administrative legislation with the participation of Lukashenko held on August 13 does not seem exceptional. The President received a suggestion to soften legislation ‘to put the business initiative at ease’ in the country. The details have not been made public, but it is known that the use of pre-trial cooperation agreement has been suggested among other things.

It is highly doubtful that the initiative about such amendments to the Penal and Administrative codes came from the business community (it does not have sufficient influence to do that). Therefore it is most likely that the initiative came from within the state apparatus. In this respect it is noteworthy that the suggestion about the use of pre-trial cooperation objectively increases the role of law enforcement authorities and the judiciary in business negotiations. The strengthening of the position of security forces is also an apparent tendency of state policy in recent years. 

Similar articles

Belarusian and Ukrainian Defence Ministries entangle in confrontation spiral
October 02, 2017 11:57
Фото: RFRM

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.