Sale of mineral resources as an alternative to privatization
The authorities plan to build the second potash plant with the capacity of 1.1 million tons per year and with USD1.5 billion of investment by 2017. Given the lack of privatization deals, the government is trying to get money from investors by offering to implement projects from a scratch, selling the mineral resources of the country.
It is planned that at the expense of a company GMC Global Energy plc, which is owned by Mikhail Gutseriev, the second potash plant will be built in 2017 with an annual production capacity of 1.1 million tons. Investment will amount to $ 1.5 billion. The Prime Minister said it would be a large-scale project concerning the development of the mineral resources of Belarus based on principles of public-private partnership. A company “Slavkali” which, according to the investment agreement between the Government of Belarus and the GMC Global Energy plc, will become the second largest manufacturer of potash fertilizers in the country and will be a 100% foreign capital company. Mikhail Gutseriev said the first installment of USD 32 million will be transferred as early as next month and that the sale of potash fertilizers from the new manufacturer will be made via the Belarusian potash enterprise.
Experts doubt that the new Belarusian manufacturer will produce 5, let alone 10 million tons of potash fertilizers annually. The payback period for a new Belarusian enterprise will depend on the situation at the global fertilizer market.
Experts doubt that the new Belarusian manufacturer will produce 5, let alone 10 million tons of potash fertilizers annually. The payback period for a new Belarusian enterprise will depend on the situation at the global fertilizer market. Today the prices for potassium chloride are rather high: USD 550-580 per ton however there are reasons to expect a reduction of prices for potash fertilizers.
The government plans to mobilize about USD 6-7 billion by opening access to the Belarusian mineral resources for investors. On the one hand, the transfer of mineral resources to investors will bring a lot of foreign currency into the country and on the other hand it will not require the privatization of the state-owned assets. The authorities plan to attract investors to develop Belarusian deposits of crushed stone, brown coal, shale oil, etc. in the future. The time will show whether these plans are realistic.
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.