Detaining journalists and searching offices of news agencies created quite an uproar in Belarus in August. The country’s economy demonstrated considerably lower growth rate. As for its foreign policy, it yet again revolved around negotiations with Moscow.
Domestic policy: The case of journalists
The Belarusian information space exploded as the news spread concerning detaining journalists employed by the independent news websites TUT.by and BelaPAN, with searches conducted in the offices of these and two more state mass media. The motive behind was allegedly the illegal access to the news feed of the state Belarusian Telegraph Agency website available only to paying subscribers. From August 7 to August 9, two dozens of journalists went through detentions and questioning. On August 9, the majority of them were released; however, the criminal cases against media employees were not dropped. The main role in the “case of journalists” belongs however not so much to detentions, but to conducting searches and confiscating data storage devices with all documents stored on them including accounting, internal correspondence, and so forth. It is obvious that in such a massive pile of information it will not be difficult to find some compromising material involving more serious accusations to interfere with the work of the news websites and put additional pressure. Such an approach was chosen by the authorities despite quite predictable international negative resonance and further undermining public trust for the state. Therefore, the main task is to achieve the fastest results in the short-term perspective and tighten the control over the independent information flow before and during parliamentary and presidential campaigns in Belarus in 2019-2020.
Reshaping the government
The focus of public attention shifted to the trip Alexander Lukashenko made to the eastern regions of the country and his criticism of the government’s work, first and foremost in the economic sector. Lukashenko also highlighted the importance of the second direction – securing the independence of Belarus while severely criticizing those who believe it necessary to become a part of Russia, and stated that Belarus will never become a vassal of any other country. As a result, the prime minister Andrei Kobyakov as well as a row of vice-premiers and some ministers resigned, and the government was reshaped. It is evident that it is yet another attempt to mobilize the state apparatus and a harder line for demands without offering any new decisions and strategic moves that could bring any positive results.
More on the issue of changes on the Belarusian government can be found in the analytical article.
Economy: Lower growth rate
During 2018 the economy of Belarus gradually slowed down, first and foremost due to worse trade conditions with the Russian Federation. According to the European Bank of Development, in June 2018 real GDP in Belarus went up only by 3,6% against the same period last year. The analytics say that the real sector finished the first six months of the year reporting the worst indicators in 16 months.
An important yet worrisome trend of the second quarter 2018 was the start of capital outflow. The net attraction of foreign direct investment made up minus $11,7 mln in the second quarter of 2018. And this turned out to be the worst result in the last five years. Net investment outflow was reported in banking in the second quarter ($37,2 mln on net basis). However, the main source of capital outflow was its IT sector with more than $91,2 mln being taken out of the country.
Positive data was reported regarding the dynamics of gold and foreign currency reserves in July 2018. Foreign-exchange reserves of Belarus grew after two months of going down with an increase of $198,8 mln and yet again exceeded $7 bn. Against this backdrop the dynamic growth of the population’s real income is still intact. This indicator grew by 7,6% in the first six months of the year. Real wages, which are calculated taking into account inflation, increased by 13% against the same period in 2017. Given all of this, the inflation rate is still low.
Foreign Policy: Moscow raising the stakes
Russia continues its economic and information pressure on Minsk. According to Reuters, the Russian authorities are threatening to limit oil product supplies to Belarus starting as early as this October. The accusations are based on the loss the Russian budget has from Belarus re-exporting custom-free Russian oil products. Kremlin demands the return of the lost profit and even blocked the supplies of re-exported oil. Russia is also intending to refuse to provide Minsk with credit resources including both the credit line of the Eurasian Fund for Stabilization and Development tranches ($400 mln), and a public loan for $1 bn within the framework of Belarus’s foreign debt refinancing. Against the backdrop of the domestic moves and the looming oil war Lukashenko made an attempt to improve the relations with the Russian Federation by having talks with Vladimir Putin in Sochi on August 22.
As for the results of the meeting, Kremlin’s press service reported that the negotiations “went well” and Putin signed the documents appointing Mikhail Babich as a Russian ambassador to the Republic of Belarus as well as a special representative of the Russian president on trade and economic relations with the Republic of Belarus. Moreover, Babich remained in the Security Council of the Russian Federation.
The combination of these positions demonstrates that Moscow is getting more active in the Belarusian direction, with the new ambassador acting as a “supervisor” in Belarus and regularly reporting the situation personally to the Russian president Vladimir Putin and the secretary of the Security Council Nikolai Patrushev. When meeting Vladimir Putin, Babich himself highlighted the fact that Belarus is Russia’s main geopolitical and military partner and this demonstrates the priorities for deeper military and political integration within the frames of the Union State.
Several days later the Belarusian view on the results of the negotiations was expressed by President Lukashenko when he was being interviewed by the TV channel “Belarus 1”. Lukashenko wanted to assure that the current state of the relations between Belarus and Russia is under control, and multiple negative fake news stories of the recent months do not reflect the real situation.
It is significant that, according to Lukashenko, the most pressing issues for Belarus such as oil and financing were not discussed. Either this was the case, or the result of the discussion was negative for Minsk.
Therefore, agreeing upon another round of top level negotiations between the presidents extended to include the heads of state can be considered the main result of the meeting, as well as appointing Mikhail Babich as the Russian ambassador to Belarus. It is most probable that Minsk is expecting to “exchange” the ambassador’s appointment for Moscow’s concessions on other issues, which will become the agenda for extended negotiations.