Protracting negotiations is Lukahsenko’s primary tactics
On March 15th, President Lukashenko took part in the meeting of the Supreme State Council of the Union State of Belarus and Russia.
Putin and Lukashenko did not agree about the most important economic issues for Belarus, which means that Belarus will be forced to resume negotiations in early summer. Objectively, this pause increases chances for the Western requirements to be fulfilled by the Belarusian authorities.
During the meeting Presidents Lukashenko and Putin did not agree about the most important matters for Belarus: the new USD 2-billion Russian loans for Belarus and the 2013 oil supply volumes to Belarus. Official reports said the presidents focused on the Union State related issues. The Union state budget is only about USD 160 million.
However, the bilateral talks’ real agenda was known from indirect sources: mergers of Belarusian machine-building, chemical, electronic, technical, and other industries (MAZ, Gomselmash, Grodno Azot, Integral and others). After his meeting with Putin, Lukashenko said that they had discussed the fate of the Belarusian Belaruskali, but had not reached any decision, putting off the issue for later.
The current situation is quite characteristic of both Belarus and Russia in recent years. On the eve of the meeting Q2 2013 oil supplies to Belarus have been signed off (based on Belarus’ request of 23 million tons pa). Thus, Belarus has once again managed to postpone the fulfillment of the requirements set by Russia at least until early summer. However, shorter negotiation periods, synchronized with the signing of the quarterly oil supplies, correspond to the Russian interests. Russia hopes for the partner’s better compliancy in a situation of uncertainty.
Therefore, it is anticipated, that Belarus’ foreign debt payments in 2013 -2014 will force the country’s leadership either to fulfill the Kremlin’s privatization conditions, or to seek for international credit support. The situation is favourable for the Foreign Ministry to continue its active policies regarding Minsk-Brussels-Washington relations, and perhaps, to partially fulfill the EU and the U.S. political demands.
The ‘pending negotiations’ situation makes it possible for President Lukashenko to carry out his usual pendulum policy. Indirect signs of this include the closure of the libel case against Belarusian journalist of the Polish Gazeta Wyborcza Andrej Poczobut on March 15th, and the granted permission to hold opposition demonstration on 24th March by the Minsk City authorities.
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.