Analytical Report: April 2013.


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The actual start of the presidential campaign of  2015 makes taking the necessary but unpopular decisions in the social and economic spheres inconvenient for the authorities. In this case, although the officials continue to talk about the prospects for economic growth, the main task of the Government is to prevent a collapse of the economy against the background of a possible recession in Russia.

Speaking of upgrading, it is necessary to consider the limitations of the available sources of financing. At this rate, the possibility, that under the guise of modernization just regular work on the optimization of business processes and the planned replacement of equipment on the enterprises will be held, is really high. And the first case has already been created. As it was stated on April 4, 2013 at the Board State Military Industrial Committee, “Minsk Wheel Tractor Plant” is actively implementing measures of the modernization program: changing of suppliers of materials and components, reducing transportation costs, saving energy resources, taking organizational and technical measures to reduce the rated salary. At the moment, the directors of Belarusian enterprises simply have no other way but making such statements. It is significant that in January-February 2013 24 organizations within the State Military Industrial Committee system, allocated about EUR 1 million for the modernization.

The need to maintain a stable socio-economic situation in the country actually means abandoning the fundamental steps to change or at least to correct the plans of government, including domestic policy. It also means the austerity of public resources, which means that even the minimal demands of national security and defence won’t be satisfied.

The preservation of Russian economic aid for at least the current level is essential for Belarusian authorities. On the one hand, this means increased vulnerability of Minsk ahead of a possible pressure from the Kremlin. However, this does not mean that this pressure will take place. And if it does, the Belarusian authorities will “surrender”. In the case of an acute crisis in bilateral relations the “patriotism factor” can be used for taking unpopular reforms. Or the external pressure will be used to justify the failures and mistakes of Belarusian authorities.

The internal situation: the stability of state power.

The most important events of the month. In April, we finally got the vision of the election program of Alexander Lukashenko. Based on the results of his message to the people and the National Assembly, as well as on a number of his speeches the key points of the program can be defined:
— Modernization of the national industry as a technical re-equipment of enterprises and the development of information technologies;
— Increase of the level of discipline in the management of the state apparatus and state-controlled companies (“iron hand”);
— Economic integration of the post-Soviet countries;
— Avoiding extensive privatization (which corresponds to the expectations of the majority of the population);
— Socio-economic stability against the background of unfavourable situation in the world economy;
— The inviolability of national independence in the face of hostile West and the East, and personally Alexander Lukashenko as its sole guarantor.

Making it briefly, all of the above stated means the preservation of the existing socio-economic and political model that lives for Russian subsidies. The political liberalization can’t be expected, although the level of repressions can be different.

The development of the situation over the last month. In early April, the head of the Belarusian Ministry of Foreign Affairs Mr. Makey addressed issues of Belarusian-European relations. Having declared the willingness of the official Minsk to start the dialogue, Mr. Makey admitted the EU visa restrictions as an obstacle to it. At the same time a reason for the importance of Brussels’ relations with our country is stated the fact, that “Belarus is already contributing to stability and security in the region”. It seems that Belarusian authorities have once again decided to “sell” its role of shield or filter to the West. It’s necessary to remember, that in 2012, there were active speculation about the situation of illegal migration into the EU through Belarus. However, despite the phobia of European elites regarding migration “waves”, Minsk failed to achieve any significant effect.

On April 9, 2013 Belarussian Foreign Ministry announced that “Belarus has taken a positive decision on the request of the Swedish party of accreditation of the charge d’affaires of Sweden in Minsk”. After the conflict in August 2012 diplomatic missions of the two countries on each other’s territory were closed. The conflict was triggered by the Belarusian party, and it was followed by a disproportionate reaction of Stockholm. It should also be noted that the Belarusian party expressed the hope that the resumption of the Swedish representatives’ work in Minsk will be targeted at cooperation in the field of technical assistance.

On April 19, 2013 Alexander Lukashenko sent a message to the people and the National Assembly. Speech of Belarusian leader has not brought any sensations. Its main feature this year was the fact that President Lukashenko had been mostly reading out prepared text and occasionally stumbling. He spoke just a few times without the prepared text. It should be noted that President Lukashenko paid little attention to China. It seems that Belarusian authorities get awareness that Beijing above all stands for its own interests and doesn’t want to become the second donor for Belarus (according to the example of Russia).

At the beginning of the speech Alexander Lukashenko said that the global economic crisis was not overcome, and it was not known, when it would happen. So, Belarusian authorities are preparing to shift the responsibility for the future economic difficulties onto the external factors. The words that Belarusian economy looks good against the background of the global crisis can testify to the refusal of excessive growth plans for the current year.

In the speech big attention was paid to the modernization issue. In this case we are not talking about changing the existing socio-economic or political regime, but only about its optimization. In this context, the probability that the modernization will turn into a set of slogans and propaganda stream is really high. During the speech Mr. Lukashenko has repeatedly stated that modernization is not the pre-election project — it is to be understood just vice versa.

Belarusian leader confirmed the negative attitude towards privatization. It has been stated that the main thing is the quality of management, not property rights. Only financially wealthy investors with the technological groundwork and established distribution systems are interesting for Belarus. Once again, Russia was accused of trying to force Minsk to sell state assets at low prices. Alexander Lukashenko declared an intention to start the privatization only after the market recovery.

The promotion of young managers was declared to be one of the priorities of the state. This is connected with staff shortages, the aging of the managerial elite and the low quality of the bureaucracy. It is doubtful that this idea has a chance for success. The situation of a permanent decline in the quality of government is a kind of trap for the personalist regimes. There the promotion in career is carried out not by nominating the most capable and professional public managers, but due to the loyalty of them to the senior management or through patronage. The only institutions of power in Belarus, where still is the selection of the best, are law enforcement agencies. Low salaries at the beginning of career can’t ensure the flow of the most professional and energetic part of the youth to the state apparatus. But the doors are open to those who, because of their moral and professional qualities, are not competitive in the labour market. The lumpenization of public administration can be observed. Speaking about the pro-government youth organizations it should be admitted that in the absence of a coherent ideology of the regime they are formed either by using the methods of forcible entry or by opportunists who seek to ensure the loyalty in order to get material privileges and career prospects. This system is reminiscent of Soviet one: the Communist Party and the Young Communist League consisted of tens of millions of members who publicly swore allegiance to the ideas of Marx and Lenin. However, when the Communist Party was banned, no one stood up to defend it.

In April of President Lukashenko continued anti-corruption rhetoric, demanding the tough action of KGB in the event of the facts of uniting of bureaucracy and business. On April 24, 2013 he spoke of the need to tighten anti-corruption legislation to prevent splash of corruption.

In addition to the anti-corruption issues and modernization another item of Mr. Lukashenko’s election program is restoring order in the field of public administration. We believe that this is connected with tough personnel decisions in respect to the Ministry of Energy of Belarus. And the accusations against Alexander Lukashenko Ministry officials are justified and fair.

On April 25, 2013 Alexander Lukashenko met with the Prime Minister of Kazakhstan Serik Akhmetov, who visited Minsk. Statements of Belarusian leader at the meeting confirm our assumptions about the emerging situational alliance of Astana and Minsk for resisting Moscow’s plans to accelerate and deepen the Eurasian integration. President Lukashenko stressed that firstly it’s necessary to create a unified economic conditions in the three countries, including the prices for energy, and only then to move on further. The economy is also a priority for Kazakhstan, which seeks to diversify its oil exports at the expense of access to the Russian pipeline infrastructure.

In April, perhaps, a record of the intensity of contacts heads of Belarusian diplomatic offices with Western counterparts was set. Within a month, 15 meetings, consultations and visits at various levels and format, devoted to issues of relations between Belarus and the West, were held. Unfortunately, their effectiveness remains in question. Belarusian-American contacts are really interesting. On April 2, 2013 the information about the meetings of Chief of the U.S. and Canada Department of Belarusian Foreign Ministry Mr. Rachkov in Washington, DC, was announced. But the announcement took place only one week after the event. It was officially reported that the Belarusian diplomat met with representatives of the State Department, the U.S. Congress and the American analytical community. In meetings with U.S. diplomats the issues of bilateral relations as well as “some international issues” were discussed. The latter are likely to include participation of Belarus in the northern route of transportation in the interest of NATO troops in Afghanistan. It should be noted that for the first time this issue was publicly announced in December 2010. Then Alexander Lukashenko had a three-hour meeting with representatives of the American analytical center “Jamestown Foundation”. And the issue of the northern route was discussed behind closed doors. A statement by Mr. Lukashenko that participation in the northern route it is not only the commercial benefit, but also a basis for political cooperation with the United States, was announced. Our assumptions may be indirectly confirmed by the fact that the meetings at the State Department were attended by representatives of the National Security Council and the U.S. Treasury. On April 26, 2013 meeting of the Minister of Foreign Affairs Mr. Makey with Charge d’Affaires Mr. Goldrich, during which a written message to U.S. Secretary of State was handed over, was held.

On April 24, 2013 in Geneva at the Preparatory Meeting of the Conference on the Treaty on the Non-Proliferation of Nuclear Weapons 2015 Belarusian representative announced the accuse of the U.S. and the UK of breaking the provisions of the memorandum of Budapest (1994) in connection with the voluntary refusal of Belarus from the right to possess nuclear weapons. The event is of little interest, however, but the reaction to it of some Russian observers was quite unusual. Some of them stated Belarusian diplomats to threat to withdraw from the NPT and even to acquire nuclear weapons.

Conclusions. An attempt to raise the issue of stability and security in the dialogue with the West means only one thing: Minsk has no other ways to raise interest in the West. “Equal” negotiations with the strong position are impossible. The issue of the release of political prisoners currently is connected with the absence of clemency requests from them. Objectively, the factor of political prisoners in the country harms the regime. However, their unilateral release may be considered as a sign of weakness of the authorities and will of political prisoners by a part of the society. The West is clearly not ready to “buy out” the political prisoners, waiting for the decision on the Belarusian authorities.

Official Minsk continues to demonstrate a desire to avoid targeting the issues of internal political situation in Belarus, but it expects to receive financial assistance from the European countries. It is expected that the Belarusian authorities will try to limit the future Swedish diplomatic mission in Belarus in terms of contacts with civil society and the political opposition. So the possible return of the Swedish diplomats in our country can’t be immediately considered as a step towards Europe.

Anti-corruption statements are more than just a part of the election program of President Lukashenko. This is also an element of the current policy to ensure integrity of the regime in order to prevent the formation of new centers of power that can be created through the merger of big business and nomenclature. An attempt to implement the latter scenario was the creation of the association “White Rus”.

Speaking of April scandal around the Ministry of Energy of Belarus it should be noted, that obviously President Lukashenko and control bodies could not be unaware of the situation in the Ministry only because of the strategic nature of the industry and the large volume of resources devoted to its development. This reinforces the impression of electoral performance for the citizens, when the righteous wrath of the country’s leader is nothing more than a prepared performance. However, the consequences for the officials of the Ministry of Energy will be real.

Speaking on the topic of Belarus’ withdrawing from the NPT it should be noted that this is complete absurdity: even if we believe in the existence of our country’s technical ability to create a “dirty bomb”, it should be taken into consideration, that the military nuclear infrastructure in Belarus is almost destroyed. An attempt to obtain the status of nuclear state is a suicide for Belarusian regime. The economic blockade of the country is the smallest effect that can be expected. It is obvious that in Moscow there are forces interested in the aggravation of relations between our country and the West.

The internal situation: the opposition and the protest movement.

The most important events of the month. The most important event of the month was the adoption of a decision on cooperation and coordination of the initiative groups of Minsk residents, who are unhappy with the plans of the authorities to hold the compaction of the city building, the destruction of green space and recreational areas, on April 4, 2013. The “starting point” was officials’ ignoring views of local people on these issues. One of the reasons for this behavior of the city authorities is that the interests of citizens come into conflict with the interests of investors, which often are Russian. It seems that the Minsk officials decided to act without taking into account the interests of the citizens and contrary to applicable law.

In order to resist the tyranny civil society activists have decided to join forces. Local initiatives could use the experience of the civil campaign “European perspective”, which today is the only functioning organization that defends the interests of people in conflicts related to urban development of Minsk. For several months, the collaboration and coordination of efforts of a number of local non-political activist groups is being held. The main point of these initiatives is the real nature of their activities, which is supported only by the personal funds of the participants.

The development of the situation over the last month. April also saw another turn of the conflict between the supporters of “involving” Belarusian regime in dialogue with the West and the supporters of hard-isolation of the regime (especially the “European Belarus” headed by Andrei Sannikov). The reason was quite sensible and moderate joint appeal of the BPF, the campaign “Tell the Truth” and the Movement “For Freedom” to the European Union to take steps forward in cooperation with Belarusian society regardless of the level and nature of the current relationship with the regime. In general, this is a continuation of earlier conflicts, many of which are interpersonal.

On April 6, 2013 Belarusian Popular Front party said it would take a full part in the campaign for the election of deputies of local Councils, which will be held the following year. The aim of participation is the willingness of the party to create an alternative to the current government. Participation in local elections is seen as a step up to the presidential elections of 2015. In addition, during the election campaign in the local councils the Belarusian Popular Front announced its intention to continue to work for the local and national campaigns to protect the interests of the citizens of Belarus. It is a pity that nothing is known about these campaigns. The initiatives, announced previously, are not reflected even on the party website. This suggests the question whether they are implemented at all. BPF leader Mr. Yanukevich confirmed that negotiations on a common candidate for the presidential elections in 2015 are unlikely to lead to the result in 2013. Moreover, he said that there are almost no wide consultations on this issue. Even the possibility of joint election observation is questionable.

On April 9, 2013 the European Parliament held a conference on “Belarusian issue”. The event was remarkable because of number of circumstances. First of all, judging by the mass attendance, in the West there is a significant amount of various researchers and specialists in Belarus. The difference of the vast majority of them is that they not only have never been in Belarus, but also, as a rule, don’t even speak Russian, (not to mention the Belarusian). Secondly, we should note a significant number of lobbies, presented at the conference. This can be seen as an indirect confirmation of the scale of the efforts made by the Belarusian authorities to restore relations with the West. Thirdly, on the sidelines there was active discussion, the meaning of which can be summarized by the formula “starting a dialogue without waiting for the release of political prisoners”. In addition, one can not ignore the opinion of some European officials that “Belarusian issue” should be solved solely by Russia.

It’s interesting to admit, that these days the Deputy Minister of Foreign Affairs of Belarus, Ms. Kupchina visited Brussels. It’s also necessary to note that the proponents of imposing sanctions on Belarusian regime were not invited to the conference. This fact is testifying to the mood of the organizers.

On April 12, 2013 Representatives of Belarusian Social Democratic Party, the Belarusian Party “The Greens”, “Fair World” party and the organizing committee for the creation of Belarusian Party of Labor announced the creation of the Platform of the Left forces. At the moment they are planning just to create a joint website and to conduct joint activities. Later, on April 17, 2013 leaders of Belarusian Party “The Greens”, “Fair World” party and the organizing committee for the creation of Belarusian Party of Labor said they would not exclude the nomination of single candidate for the upcoming presidential elections.

It should be noted that “The Greens” and the organizing committee of the Labour Party don’t actually have any activities and are some kind of “virtual” parties in Belarusian politics. “Fair World” has also sharply reduced its political activity, which may be connected to fears of repressions by the Belarusian authorities. As for the Social Democratic Party, the actual number of its activists, according to the most optimistic estimates, does not exceed 300 people, and most of them are the elderly.

Conclusions. The union of local initiatives Minsk takes place in relatively good time. In Belarus the presidential campaign has actually started. Alexander Lukashenko, having a low rating, is trying to regain the image of a fighter against corruption and a defender of the people from the tyranny of officials. It is unlikely that the authorities are able to continue to ignore the coordinated actions of civil society activists in the field. Especially because the conflict around the compaction of city building in Minsk known at the top, and Alexander Lukashenko has previously voiced accusations against the Minsk authorities in being far from the people and corruption.

The April conference in the European Parliament has demonstrated further decline in the value of Belarus for Europeans. This is due to the economic crisis that hit the EU, as well as the events in North Africa and Syria. They require more attention than the state of affairs in our country.

The united Initiative of Belarusian Left forces is, in our opinion, commercial in nature and is aimed at raising funds for electoral cycle of 2014-2016. It is doubtful that even with the “Fair World” and the Social Democratic Union the Left union has the capacity to conduct full-fledged campaign.

Economic situation.

The most important events of the month. In April, the Belarusian economy continued to develop the trend of the first months of 2013. Despite record since the beginning of the year payments on external debt service (only for repayment of the IMF loan was spent over USD 260 million in April) the reserves (hereinafter GCR) for April rose even by USD 106.2 million. This is connected with getting another portion of funding under the EurAsEC AF loan (April tranche amounted to USD 440 million) and the favourable situation at the domestic market: according to the head of National Bank Ms. Ermakova net purchase of foreign exchange control in the domestic stock market in April was approximately USD 300 million. The increase in reserves occurred against the background of falling gold prices on the world market, the losses due to which, estimated by the authorities, were about USD 250 million.

The development of the situation over the last month. In addition to borrowing from foreign creditors and the government continued to work in the domestic foreign exchange market for government bonds. So, in the end of April were consistent placement of government bonds held in the framework of bilateral trade and through the auction for the sum of USD 75 million and USD 50 million respectively. In sum, the Government estimates the potential of the domestic market of foreign currency loans in the amount of USD 300-400 million, and plans to continue working in this segment (source).

In April the acceleration of monetary policy easing could be noted. Thus, the refinancing rate was first reduced by 1.5 percentage points, and then Chairman of the National Bank Ms. Ermakova said about preparing the next reduction in early May. As a guideline, the authorities are using the current inflation, which in March and April, not least by limiting the growth of regulated prices braked sharply (in March it was 1.1%, and in April it is expected to be less than 1%). The decline of rates in other segments of the money market continued: the market of deposits — to an average of 28-32%, corporate loans market — 38-42%, in the interbank market rate remained at 18-19%.

The implementation of the budget became normal again: in March the total surplus of the state budget was Br 3.5 bln., accounting for 2.9% of the current GDP.

If indicators of financial stability of the economy are quite satisfactory (which confirms the change by S&P the credit rating outlook on Belarus to “positive”), the situation in the real sector of the economy is of concern. Against the background of falling demand for Belarusian products in foreign markets (primarily Russian) the authorities continue to hold to the plan of GDP growth. As a result, for the first four months of the year there have been some problems in the real economy: on April 1, 2013 stocks of finished goods rose to 79.7% of the average monthly level of production (supply) and continued to increase, the profit compared to previous year was seriously reduced (by 41% of the previous year), the receivables significantly increased. Timid attempts by some officials to suspend the continuation of this practice were publicly criticized by the local authorities. Of course, the policy of accelerated investment in stocks may not last long, as would seriously undermine the financial situation of enterprises and end reduction of the trading capital. In fact, the main hope is the revival of the Russian market in the near future (for example, the management of MAZ expects growth in demand for its products by the end of May). If significant growth in economic activity in Russia still does not happen, which is seen by many analysts as the basic scenario, the Belarusian enterprises will inevitably have to cut production of many kinds of products with all the ensuing consequences (rising unemployment, reduced incomes). Attempts to replace the external demand with the internal one will lead to a deterioration of the balance of payments situation and destabilize the whole economic situation.

Conclusions. After all preparations were made financial authorities took a break during another placing on the Eurobond market. This suggests that government experts expect in the foreseeable future the reduce of the yield at current prices of Belarusian Eurobonds and thus movement of the potential rate of new placements to an acceptable level. The criterion can be considered the cost of latest borrowing in the domestic market (6.9% and 7.25% per annum). In addition, the fact that waiting is against the background of not the worst conditions (for example, quotes of a seven-year bonds reached historical highs on April 30, 2013) leads to the conclusion that the Belarusian authorities do not have any concern about their financial ability to service the national debt and ensure stability in the foreign exchange market. For comparison, in early 2011, the rates at 8.75% and 8.95% did not become an obstacle to the authorities’ entering the market of sovereign bonds.

The further easing of monetary policy, expected earlier, has a number of potential threats. Firstly, the reduction of interest rates on ruble deposits below a psychological level (below the devaluation expectations) can spur the conversion of ruble assets into foreign currency and to put pressure on the exchange rate or on gold reserves. Secondly, the part of the ruble money supply, which has seriously increased over the past six months and is now in a state of excess liquidity (in the order Br 7-8 trillion) can go into the economy in the form of loans, which in Belarusian realities means an automatic growth in consumer and investment imports. Overall, however, these risks should not be overestimated (for example, total all non-transferable ruble deposits in terms of the order of USD 4.5 billion of gold reserves at the national definition almost USD 10 billion), and their implementation is not able to lead to a repetition of the disastrous events in 2011. Moreover, taking into account the authorities’ focus on preserving financial stability in the economy it can be expected that the National Bank will go to the next tightening of monetary policy. The rationale is to prevent the weakening of the ruble against a basket of currencies since the beginning of the year in real terms, the ruble has grown by 3.7% , which has a negative impact on export activity in the country.

National Security and Defence.

The most important events of the month. The most important event of the month, of course, was a regular meeting of the joint board of the Ministries of Defence of Belarus and Russia in Minsk on April 23, 2013. On the same day the plans to create in our country a Russian air base until 2015 and the next year transfer of four battalions of air defence systems S-300 were announced. We dedicated a special article to the topic of the airbase.

It’s essential to admit that there is still no clear position of Belarusian party on the prospects of the Russian aviation presence. Following the statement by representative of the Foreign Ministry of Belarus in the interview to Russian newspaper “Kommersant” that he has no information about the negotiations on the deployment of Russian air base, there is a feeling that the Belarusian has started some kind of a game.

Already on April 26, 2013 Alexander Lukashenko said that the Russian aircraft may be incorporated into the Belarusian units. In our opinion, this is only possible if it would be a transfer of the Russian fighters to Belarus for use with the preservation of property rights of Russia. We should also pay attention to the words of his speech that “… we (Belarus) buy  Russian Su-27, MiG-29 or the more modern aircraft … I, as commander in chief, need two dozen modern aircraft.” Recent deliveries of the Su-27 and MiG-29 took place in our country in the 80’s. In addition, Su-27 is not produced, the MiG-29 is available only in a version of based fighter. And it is possible to purchase this aircraft only from the stock.

It is also necessary to admit very limited reaction on the part of Lithuania and Poland. It seems, that this news for them was expected because either of the logic of the development of the Belarusian-Russian defence cooperation, or due to leakage of information. Restraint attitude of neighbouring NATO countries can be explained by the fact that the establishment of a Russian military base is far from being a done deal. Statements of the Russian Embassy in Minsk look like an attempt to soften the appearance of conflict after the actual refutation of Sergei Shoigu’s words by President Lukashenko. Russian diplomats argue that it is a form of cooperation between the two countries in the field of security and that it will be decided in the future, what form it will finally take (airbase or delivery of the equipment).

Speaking about the forms of the Russian military presence in Belarus it is necessary to take into account society’s attitude to this problem: the 52.2% of Belarusian population  are strongly against the deployment of Russian troops in Belarus, a third of the population are willing to tolerate them only in exchange for economic assistance.

Regarding the transfer of weapons it should be noted that they will be transferred according to the actual technical condition and completeness. It is proposed to carry out the transportation and repair techniques for the expense of the Belarusian side. Judging by the fact that we are talking about the repair, we can expect the transfer of early series of complexes from Russian stocks. Obviously, they will need not only to repaired, but also modernized. Considering the fact it is a gratuitous transfer, it is really great, even with the fact that the weapons were in use. It remains a question whether together with complexes the missiles will be transferred.

The development of the situation over the last month. The story of a possible Russian air base in Belarus has overshadowed another equally important aspect of the Sergei Shoigu’s visit to our country. At the joint board of defence agencies the implementation of a comprehensive program of military and scientific cooperation for 2011-2015 was discussed. Russia seeks to avoid import components for weapons produced by Belarusian military-industrial complex. The task is to accelerate the development of the concept of bilateral science and technology program for the design and development of large scale integrated circuits of special and dual use, that are necessary for control units and other equipment in strategic arms and weapons of destruction and missile defence.

On April 1, 2013 Alexander Lukashenko dismissed the First Deputy Chairman of the Belarusian KGB counterintelligence activities Major General Victor Vegera. The event was expected because the officer was of retirement age. A certain intrigue remained around his successor. But on April 12, 2013 Igor Syarheenka was appointed the first deputy chairman of the KGB, and Igor Busko was appointed Deputy Chairman of the KGB, staffing and organizational work. Both of them can be classified as leaders of the “Soviet school”.

On the same day the name of the head of the Department for operational and investigative activities of Ministry of Internal Affairs (the so-called criminal intelligence) was announced. A police colonel Ivan Podgurskiy, who since September 2011 had led the Department of Internal Affairs on transport (which is now defunct), was appointed to this position. He made his career in the criminal police, occupying positions of Deputy Head of the Main Directorate for Combating Organized Crime and Corruption of the Interior Ministry and Chief of the Criminal Investigation Department.

In April, the situation about the prospects for the creation of aviation components of the Collective Security Treaty (hereinafter CSTO) became clearer. The need for it is mainly associated with threats that may arise after 2014, when the ISAF troops will be withdrawn from Afghanistan. CSTO leaders expect serious deterioration of the situation in the countries of Central Asia, increased infiltration of extremists from Afghanistan, where there are functioning militant training camps for natives of the CSTO member-states. It is planned that the CSTO will get at the disposal the assault, fighter, bomber and military transport aircraft. The primary objective is stated to support air operations with ground forces peacekeeping forces, especially in the highlands, against terrorist groups.

On April 16, 2013 under the chairmanship of Deputy Prime Minister Petr Prokopovich a round table discussion on the problems of development of Belarusian military-industrial complex was held. Petr Prokopovich encouraged to set ambitious targets for the conquest of leadership positions in the markets of weapons. In turn the management of State Military Industrial Committee spoke about the problems, the most pressing of which are:
— Low level of human resources, especially the lack of engineers and scientific schools in priority areas of development;
— Inadequate funding of priority development of the state;
— State-set prices for military products and services are not attractive and do not allow the industry to attract private companies.

On April 22, 2013 Alexander Lukashenko appointed Roman Golovchenko Ambassador Extraordinary and Plenipotentiary of the Republic of Belarus to the United Arab Emirates. Since December 2009, Mr. Golovchenko served as the First Deputy Chairman of the State Military-Industrial Committee. It is interesting to note that the appointment was made after a visit of Belarusian leader in the UAE last month.

Conclusions. Speaking about the hopes of Alexander Lukashenko on the supply of Russian aircraft for the Belarusian air force, it should be noted that in Belarus there are 18 Su-30 (“… two dozen modern aircraft”), previously used by the Indian Air Force and returned to Russia after getting the fighters of more modern versions . Perhaps negotiations on their transfer to Belarus are continuing and Belarusian leader revised his decision to abandon the procurement of used weapons. Given the fact that so far “Indian” Su-30 have not been sold to a third country, the probability of their supply to Belarus in our opinion is quite real.

It is clear that any decision on the problems of the Russian air base in Belarus will be primarily political, not military. Its defence value is rather symbolic because of the small number of aircraft against the background of the fact that the hypothetical war in the region can only be a large scale one. In the meantime, the probability of conflict is the lowest in history. Although Belarus has legitimate concerns about the plans to transform the Polish Army in the army of “intimidation” (according to the Polish Foreign Minister Sikorski).

An indicator of the severity of the issue of the Russian air base for relations between Minsk and Moscow will be the readiness of Russia to continue to meet the latest demands of Belarus in the supply of oil. The most convenient time for the start of the deployment of the Russian airbase in our country will be military exercises “West 2013”, which can result in a number of fighters’ remaining in Belarus. If it does not happen, then the probability of creating a Russian air base in Belarus will rapidly decrease.

The appointment of Mr. Busko and Mr. Syarheenka means that changes in the methods of work of security services (particularly in relation to political opponents of the regime) are unlikely. This decision can be seen as a sign of mistrust of Alexander Lukashenko to younger leaders of KGB. It is likely that such an attitude is objective and caused by a low level of professionalism. As a result, President Lukashenko has simply no choice but to appoint the leaders of the “Soviet school”.

It should be noted that at the moment there is no official publication of the Regulations of the Department for operational and investigative activities of Ministry of Internal Affairs, which may indicate that a document is a secret one. This confirms our view that expanding the functions of the Department, compared with the Directorate of operatively-search activity, which preceded it. In fact, it can be about creating another security service designed to ensure the internal security of the state in Belarus. This corresponds to the logic of fragmentation of law enforcement agencies and establishment of a number of centers of decision-making in the field of national security.

The need to include fighters, the main purpose of which is air defence and conquest of the air, in the CSTO aviation is not clear. Islamists do not own aircraft. The explanation may be the possibility of mutiny in the armies of the member-states, including the Air Force taking the side of religious radicals. Previously, all of the CSTO military aviation will be based on the Russian air base in Kant (Kyrgyzstan). Most likely, it will also consist of aviation, which is already based there. So, the small budget of CSTO is quite logical: financing of the activities of the unit will go through the Russian budget and there is no need to transfer money from one “pocket” to another.

Speaking on the development issues of the national defence industry mentioned on April 16, 2013, it seems strange that the issue of availability of appropriate human resources for the implementation of priority programs is targeted only now, and not at the time of the formation of the list of them. In this regard, the most likely cause of the problem may be:
— outflow of personnel from the Belarusian defence enterprises;
— the request of the state in fundamentally new types of defence products (for example, the means of destruction based on new physical principles).

Moreover, the second reason seems to be more likely.

It is highly probable that the main task of the new Ambassador of Belarus to the United Arab Emirates will be the promotion of defence and dual-use products at the market of Arabian monarchies, that are one of the richest today. But the prospects of the Belarusian-Iranian relations in the defence field are not clear. Taking into consideration the traditional tension between Tehran and its southern neighbours in the Gulf it is doubtful that the Belarusian authorities will be able to “have it both ways”. Perhaps we are talking about terminating or decreasing the intensity of contacts with Tehran, which in connection with economic sanctions and exchange controls is has small interest for Belarusian defence products in the foreseeable future.