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BELARUS – RUSSIA: THE PROSPECTS OF INTEGRATION
YAROSLAV ROMANCHUK,
President of the Minsk-based Mizes Center
EURASIAN HOME: “What are the prospects for the Constitutional Act approval through the general referendum in the framework of the presidential election in Belarus?”
The Constitutional Act has become another long-standing project in the process of the Belarusian-Russian integration. Regardless all Moscow and Minsk’s assurances about mutual understanding, progress and relationships improvement, the course of discussion and passing of the most important documents do show that the integration between Belarus and Russia remains on paper.
Powerful oligarch groups were integrated a long time ago. The fuel and energy complex has adapted to the both countries’ laws. The present institutional and legal situation plays into criminals and shady businesses’ hands. Since official Minsk and Moscow cannot finally set the overall nature and modalities of their relationships, the Constitutional Act talks have turned into a way of maintaining the status quo until either of the parties obtains other arguments in favor of its Constitutional Act version.
Those arguments can appear only after the presidential election in Belarus. Of course, Moscow has supported Aliaksandr Lukashenka and it counts on Minsk’s benevolence after the presidential election. However, it may face another cold shower. Last week, Lukashenka repeated that he is not going to sell the gas and oil sectors of the country. The President reiterated his statements on energy security and the need to cover 25% of energy supply with domestic resources. At one of the recent meetings with people in the provinces Lukashenka said that it is necessary to have “burzhuikas” (cast-iron moveable wood stoves) ready in order to secure oneself in the case of gas lack.
Evidently, Russia intends to impose the world gas prices and a different oil policy on Belarus. If Lukashenka was going to sign the Constitutional Act on Russia’s terms and if he planned to let the Russian capital to Belarus, he would be acting in a totally different way. The present Russian gas price for Belarus is another victory of Lukashenka in the relationships with Russia. During the conflict between Russia and Ukraine he won the Kremlin’s support for his political campaign. But in return he has given Russia just another series of promises. Grounds to believe that these promises will not be kept are becoming firmer and firmer.
The Constitutional Act will remain a sore point on the agenda of the talks between Belarus and Russia. If the Kremlin insists on holding the Constitutional Act referendum, Lukashenka, depending on the contents proposed, will get results that are politically profitable for him. The way of conducting referenda and elections in Belarus leaves no doubt about that.
When once again Russia will not receive what has been promised to it, except for assurances of everlasting friendship, Russia may significantly alter its attitude towards the Belarusian authorities. Lukashenka’s lobbyists in Moscow (the Russian military-industrial complex, the Communist Party of the Russian Federation, the Ministry of Foreign Affairs, a lot of oil companies, Russian Orthodox Church, Yury Luzhkov and others) will continue to influence the Russian government, but they may have to change their policy if the Kremlin demands that.
So, there will be no Constitutional Act in the near future. If the heads of state sign it, the parties will manage to get the required results at the referenda appealing to the “the people’s choice”.
EURASIAN HOME: “What are the main reasons for the failure of talks on single currency?”
The Single Currency Project is still less successful than that of the Constitutional Act. It was initially doomed to the 10-year talks. Unlike treaties, single currency requires that the countries’ economic systems be properly prepared, the single rules of the game be adapted in the monetary sphere and the budget and tax policy be coordinated.
There must be discipline while implementing all those parameters, together with the National Banks’ independence and, of course, the closeness of the countries’ economies. Russia and Belarus play with slogans instead of establishing the program to reach the single parameters of the monetary and fiscal policy, to lay down the inflation and devaluation level as well as to get to the full liberalization of the current and capital accounts and to coordinate the debt service policy.
Taking into account that the Russian and Belarusian ruble inflation exceeds 10% per year, the state aggressively interferes in the bank sphere and the financial markets’ development is still in progress while the Belarusian financial markets are not even formed, what kind of stability of the future single currency are we talking about? Neither the Russian ruble nor the Belarusian one can be the single currency. Russia and Belarus are not an optimal single currency area.
Unlike Russia, Belarus has the planned economy where 80% of assets are the state’s property. If current trends continue, the single currency introduction would come as a shock for those two countries. Russia would not feel Belarus adopting the Russian ruble, since the scales are quite different. But Belarus would have to seriously revise its monetary policy as well as the relationships between the banks and the real sector, and between the state and the economy on the whole.
For the Belarusian economy, toughening of the monetary and fiscal policy implies the painful restructuring process, which is always accompanied by the unemployment growth. It is beyond me to realize why Russia should impose such unpopular reforms on Belarus.
The issue of the financial and monetary integration should be raised only if this project is not politically loaded and if it is implemented in economies of the same type. The agenda of the negotiations between Russia and Belarus seems to keep having the single currency issue in order to create the integration illusion once again. Is the imitation covered by the CIS not enough?
EURASIAN HOME: “What is Europe’s stand on the presidential election in Belarus?”
The stand of PACE, OSCE and the European Parliament on the elections in Belarus is well-known. Those organizations do not expect democratic and open elections to be held in Belarus. ODIHR has raised the question whether the observation is reasonable, since the equal competition among the presidential aspirants is out of the question. As for Belarus’ situation, a lot of resolutions have been passed; conferences and consultations have been conducted. The single democratic presidential candidate Aliaksandr Milinkevich met the EU’s senior officials, Ministers of Foreign Affairs and German Chancellor Angela Merkel. These facts indicate that the political and moral support is given to the Belarusian democrats.
The European Commission says that there is much work done behind. However, the Belarusian opposition believes that it is not enough to influence the situation in the country. The European Commission backed the Deutsche Welle broadcasting project in Belarus, but its format has a next-to-nothing influence on the Belarusian people. Institutionally the European Commission is not ready to work with the Belarusian civil society in full measure.
There are countries that address Belarus’ problem more actively than Brussels does. Those are Lithuania, Poland, Slovakia, Sweden and Denmark. Germany is getting more and more involved in this process. In Brussels attempts are made to envisage the Belarus issue as a pan-European problem, rather than that of Belarus’ neighbors.
A serious progress has been made in this area. It is worth noting that even now many EU countries think that this problem should be solved only through the talks with Russia. So, the term “Europe” implies different and even opposite views. In general, I would say that the European policy pursued by the EU towards Belarus is a passive contemplation.
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