Analytical Report: February 2012.

418

The events of February will have great influence on the further development of Belarus.

The first signs of degradation of the state mechanism have clearly shown for the first time. The authorities confirmed their inability to provide adequate funding for military spending in particular and the law enforcement agencies in whole. At the same time that the country has sufficient resources — the only problem is their use.

Diplomatic conflict with the West will have far-reaching consequences not only in political but also in finance sphere, which is the most important. The threat of economic sanctions is very real, although it should be understood that such decisions aren’t taken quickly. However, the Belarusian authorities (or certain ruling circles) are doing everything to make Europeans act fast.

The departure of European ambassadors from Belarus has made the political maneuvering for Belarusian authorities extremely difficult. However, according to the behavior of Belarusian authorities, they still don’t understand that.

On the other hand, part of the opposition has demonstrated that for effective action it is not necessarily to form coalitions, alliances and other political blocs: the organizations that have a desire to work, have achieved some success.

Although the economic situation is still stable, it should be noted, that this stability does not have the sustainable basis and is entirely dependent on Russian support and is connected with Russian authorities’ turning a blind eye to the customs accountability manipulations by the Belarusian side.

The internal situation: stability of state power. The most important events of the month can be divided into three groups:

— The authorities’ efforts to resolve the personnel problems in public administration;

— A series of protests of employees across the country with the demands to raise wages;

— Aggravation of relations between the EU and Belarus.

At the same time the authorities acknowledged the deterioration of the budget structure because of the reduction of the share of investment spending. The problem is that, despite considerable efforts, the modernization of national infrastructure can’t be carried out completely. In the situation of budgetary constraints Belarus may face serious disruptions in the functioning of public utilities within 3-5 years. And then the stories about Russian cities, freezing in winter, that are so beloved by Belarusian official media, will become our reality.

In February, Belarusian authorities continued attempting to improve the situation with the personnel in public administration. The salaries of officials will be increased. The young officials will get additional payment for proficiency almost immediately after starting the career. However, in our opinion this measure will not be able to influence the situation. The point is, that the salaries of lower- and middle-level civil servants are scanty and don’t match the realities of the employment market. The results of an experiment conducted in the Council of Ministers, where the bonus fund will be increased by reducing the number of employees by 20-25%, will be quite interesting. If the experiment is successful, new scheme will be possibly implemented in all bodies of state administration.

However, the impact of this experiment can be seen only at the end of this year. So far, the only incentive for civil servants is the possibility of obtaining easy credits for housing construction. It should be noted that the low quality of personnel in government affects the stability of the existing socio-political system in whole. The personnel factor, being the Achilles heel of Belarusian authorities, can be used by external actors to destabilize the regime. Such scheme can be demonstrated by the example of Libya, where many of the high-ranking officials were bribed and took the side of the rebels. After that the middle and low levels of government were paralyzed, the rear was disorganized and the regime was destroyed.

During the month there were reports of protests of employees who were dissatisfied with the level of wages. Moreover, the protests took place at both public and private enterprises. The protests were spontaneous and were the result of self-organization of workers: neither independent trade unions nor the opposition organizations were connected to them. Moreover, there was even no attempt to take advantage of the protests by the political opposition. The authorities continue to control the social situation. It should be noted that if in the past year the settlement of labour disputes involved officials of the national level (including the Chairman of the KGB), now all the issues are solved at the local level. Thus, the social protest is not regarded as probable threat to the regime by the authorities, which is an adequate assessment of the situation.

Of course, the key event of the month was the failure to revive Belarusian-European dialogue. At first it is necessary to underline, that involuntary beneficiaries of a new conflict with the EU are located in Moscow, but the initiators — in Minsk. And we think, that the culprit of deterioration of the relations is the European Union. Allowing the official Minsk to talk from a position of strength and make different insults in 2011, the Europeans have created the illusion of permissiveness in the expressions and actions in the minds of Belarusian authorities, which provoked them to another dramatic move, which could have been avoided, if the European officials have shown proper pride.

February began with Mr. Wiegand’s visit to Belarus. The visit of a senior European official gave some analysts the reason to talk about the possibility of adopting a “Mladenov plan number 2” on the normalization of relations with the EU. However, unfortunately the main questions has not been answered: who was the initiator of the visit. It should be noted that during 2011 an official of higher rank — Commissioner Fule planned visit to Minsk. However, each time the visits were canceled through the fault of the Belarusian side. In our opinion, the initiative of the visit of Mr. Wigand still comes from Brussels: Belarusian authorities have managed to force the EU to make a small step forward with the help of the myth about the “Russian threat”. The success of the Belarusian side was ensured by three factors:

— The lack of an overall strategy on Belarus in the West;

— The presence of the lobby of some EU countries that are actively concerned with the increasing influence of Russia in Belarus, but in fact are defending the interests of their own business community;

— European officials heard about the “Russian threat” not only from their Belarusian colleagues, but also some from the Belarusian opposition politicians and experts.

The latter has established the necessary background, which was the main reason of the visit. It should be noted that Mr. Wiegand openly stated that the purpose of his visit was the normalization of relations with Belarus. Belarusian authorities have incurred some reciprocal obligations, but in the traditional manner didn’t hurry to implement them. Succumbing to the illusion of the resumption of dialogue, the EU has reduced the extent and severity of the next round of sanctions adopted by the end of the month. The reaction of the official Minsk was frankly disproportionate. This was connected with the fact that initially the Belarusian authorities were prepared to react for an initial package of sanctions, that in addition included prohibition to enter the EU for more than one hundred persons and a blow to the interests of the “court” business. The fact that Belarusian authorities would react to the sanctions was clear according to the sentence to Sergei Kovalenko and two films, in which Polish and U.S Embassies were discussed.

The film “Polish Lessons” will be dwelled on below. In addition, the joint statement of President Lukashenka and Dmitry Medvedev on February 24, 2012 about the prospects for the expansion of sanctions against Belarus could be regarded as a kind of warning to Brussels. It’s interesting, that the joint statement focuses attention on economic sanctions, but not the visa restrictions. Following the adoption of the shortened sanctions package by the EU, an error in decision-making mechanism of Belarusian authorities occurred. There was a reaction, prepared as a response to an initial package of sanctions, not for the adopted one. In our opinion, the failure was not accidental, but provoked. Belarusian top bureaucracy can be divided into two weakly structured parts with fairly blurred boundaries:

— Supporters of a liberalization of the system with the help of the West;

— Supporters of mobilization of the country. They believe that reliance on Russian aid would allow them to preserve the political situation for a long period.

It is necessary to understand that the first group is not pro-Western and the second one is not pro-Russian. We are talking exclusively about the competition between two strategies for the keeping of power in their hands. The main tool of this rivalry is struggling for the opportunity to inform Alexander Lukashenka and stress some points in the information provided.

EU reaction was complete shock to the Belarusian authorities, who hoped for the traditional clumsiness of the Europeans in such questions. The statement by Mr. Putin that he was sorry about the withdrawal of ambassadors and that he was sure, that the Belarusian-European conflict would not interrupt further Belarusian-Russian integration, was seen as a blatant insult in Minsk.

Ambassadorial conflict was unequivocal defeat of Belarusian authorities. Firstly, the supporters of flexible line towards Minsk in the EU have to keep silence now, at the same time the opponents of Belarusian regime have got another incentive to intensify the pressure on Belarus. Secondly, the Belarusian authorities are perceived as unable to negotiate, the credibility to them has been completely lost. Thirdly, the lobbyists of Belarusian authorities, whose actions have contributed to the EU moves towards the official Minsk and indirectly provoked the conflict, have got in an awkward situation. Fourthly, the loss of reputation of the country is so serious, that no remarkable investors will participate in Belarusian economic projects. Fifthly, the threat of effective economic sanctions has grown largely. Statements that the EU will never agree to economic sanctions, because it will threat the commercial interests of the Europeans themselves are questionable: the cases of Syria and Iran, which pose no threat to the EU, show that commercial interests are not necessarily determining European policy.

The claim that the sanctions, whether they are introduced, can be easily neutralized by trade through third countries is a demonstration of ignorance of business processes. Firstly, the creation of a chain of mediators requires considerable additional expenditures that are possible either by increasing the final cost of the goods, which can make them uncompetitive, or by reducing the profits of Belarusian merchants, which is a direct blow to the economic system built by the authorities. Secondly, the ability to conduct effective economic activity through the intermediary counties is determined only by approaches of countries imposing sanctions. The experience of Iran just shows that the Europeans can act efficiently, if necessary, although not immediately.

It should be noted that on February 10, 2012 the EU Council adopted a resolution extending the possibility of sanctions against entities and citizens of Belarus. Now, the sanctions can be imposed on people who benefit or support the regime of Alexander Lukashenka, which means anyone in an arbitrary choice.

Next it’s necessary to admit that usually during discussions about the possibility of sanctions against Belarus, the attention is paid only to one product group — petroleum and petroleum products. Meanwhile, Belarusian export of textile, wood products and fertilizers in the EU is considerable. And it can be easily blocked. However, let’s pay particular attention to potash fertilizers: 1/3 of “Belaruskali” total exports  goes to the Western countries. The deliveries are made through the “Belarusian Potash Company” (hereinafter referred to as BPC), one of the founders of which is Russian “Uralkali”. The imposition of sanctions against the “Belaruskali” and BPC will lead to exit of “Uralkali” from the BPC and the reformation of the international potash market, which will result in aggravation of the position of Belarusian company.

Also it’s essential to keep in mind that even imposing sanctions against Belarusian enterprises, the West is quite able to deny access to its credit market for the Belarusian authorities and for business entities, as well as to block the credit facilities in international financial institutions for the country.

And finally, speaking about the possibility of introducing the sanctions of EU against Belarus, the attention should be paid to the last argument of those who argue that sanctions are not possible: EU seeks to prevent the fall of living standards in Belarus. The events of last year show that the humane feelings have not prevented the Europeans to introduce de facto trade and economic blockade against Iran and Syria. At the same time, Iran has always been more interesting, promising and responsible partner for foreign companies than Belarus.

On February 12, 2012 Belarus television showed another film in the genre of investigative journalism called “Polish Lessons”. It contains the traditional accusations of Poland in support of the Belarusian opposition (which is true), and allusion to the fact that Poland has provided financial support of provocation near the Government House in Minsk On December 19, 2010. Much operational material of Belarusian special services is used in the film. In our opinion, the most interesting part of the film is the moment, when a dispatch from the Polish Embassy in Belarus with supposedly the words of Mr. Nyaklyaeu is discussed. It supposedly reads that after coming to power of Belarusian opposition, Lithuania, in contrast to Poland, will not be able to count on the fruitful bilateral cooperation with Belarus due to the actual support for the regime of Alexander Lukashenka.

Taking into consideration the complicated relations between these EU members, the attempt to provoke a conflict between them is obvious. Perhaps, the aim of that provocation was based on the fact that Lithuania would lobby for the official Minsk in the European structures, in order to outperform Poland and to defend its own interests in Belarus, more actively. However, it seems doubtful that these words of Mr. Nyaklyaeu (if it were really his words) could get to the dispatch of the Polish Embassy — at least due to the fact that the West (and Poland in particular) has a realistic view of Belarusian opposition chances to come to power, and such statements are of no interest for Poland at all.

The internal situation: the opposition and the protest movement. In February the series of conflicts in the opposition camp continued. We can surely say that the unity of opposition groups can’t be achieved. But it’s not something tragic. Especially because of the fact, that some part of the opposition managed to find a good field for action, which, on the one hand, it is relatively safe because doesn’t affect the power directly, and on the other hand is positively perceived in Belarusian society. And it is clearly advantageous, because the authorities have nothing to struggle with it. It is all about countering the Chinese “expansion” to Belarus. In addition, the opposition has demonstrated new and quite effective ways to intensify its activity in the social and political life.

At the same time the authorities tried to work out a new scheme of pressure on opposition activists.

February began with a scandal connected with an initiative of Brussels’ “Office for Democratic Belarus” (hereinafter referred to as ODB) to revise the list of Belarusian citizens prohibited to enter the EU. It should be noted, that ODB is quite an interesting organization: the office has been created with the support of former U.S. Ambassador to Belarus Mr. Speckhard with the claim of influence on the formation of EU policy towards Belarus. However, in reality, ODB is nothing more than its founders and its importance is extremely small. But it’s necessary to admit that the organization, in a similar way representing Denmark in Brussels, is patronized by the members of the royal family of this country. It is obvious that the head of ODB Ms. Stuzhinskaya is not the initiator of the controversial proposal. She just got the role of mediator. In this commercial background of the Ms. Stuzhinskaya’s initiative is unquestionable among the opposition. In addition, it should be noted that the initiative to revise the list of entry-level officials is behind the scenes supported by a number of Belarusian opposition politicians who are worried about the increasing influence of Russia in Belarus.

The conflict on the issue of participation in elections to the House of Representatives and the initiative ODB actually became a boundary to separate the Belarusian opposition in two parts: the supporters of tough confrontation with the authorities and using the international pressure and the moderate part, who don’t tend to rely on external intervention. At the same time, in our opinion the claims, that the moderate part of opposition don’t struggle with the regime and in return will get parliamentary seats, have no actual ground. Tacit agreement with the subjects of the opposition, which had previously taken place, were violated by the government violated. And no one have illusions about the regime being able to follow some agreements.

The month was marked by increased pressure on opponents of the authorities. Thus, in early February, the information about the possible start of the prosecution of the opposition, advocating increased sanctions against the Belarusian authorities, appeared.

At the same time, in Novopolotsk the authorities started a campaign to discredit the young civil society activists by accusing them of neo-Nazi views. It was announced that during the search in activists’ places the information on relevant topics was found. In addition, not only the activists but also their families and relative got under pressure. Such tactics was used by the authorities in Novopolotsk in 2006. Then, similar accusations from the local and national state-run media were addressed to the BNF Youth local organization head Alexey Trubkin.

In February the “anti-Chinese front” in Belarus extended: the actions of “Tell the Truth” to counter the creation of the Belarusian-Chinese industrial park in the Minsk region and construction of the hotel “Beijing” in Minsk were supported by other opposition organizations.

It’s necessary to remember, that according to private arrangements eight thousand hectares in Minsk and Smolevichi areas have been provided to accommodate the Chinese companies. The area is inhabited an involved in the economy actively. It is highly probable that the authorities will try to confiscate homestead land in order to place plants there. On February 5, 2012 “Tell the Truth” organized a meeting of holiday village inhabitants, whose homestead land is situated in the potential evacuation zone, in order to collect signatures against the project.

It should be noted that the topic of “Chinese threat” is politically advantageous. Belarusian society is conservative, so any arguments of the government in defence of projects are unconvincing for the public. In fact, the “Chinese issue” today is the only topic, which is actively and effectively used by the opposition with the mass support of the folk. Moreover, some officials, unhappy with the intensification of Chinese investors, provide undercover support to the actions of opposition. The latter is an illustration of the lack of unity among the Belarusian top bureaucracy.

However, speaking about the issue of construction of the hotel “Beijing” it’s necessary to note, that main organizers of the protest are the unions of environmentalists. And “Tell the truth!” just joined the campaign, but now tries to use information resource in order to catch the public attention.

On February 6, 2012 Russian political analyst Alexander Suzdaltsev, who specializes in the study of Belarus stated that the authorities were funding the campaign “Tell the Truth” and at the same time Mr. Sannikov in 2010. It should be admitted, that the “sensation” by Mr. Suzdaltsev is extremely outdated: the rumors that the campaign “Tell the truth!” was funded by the Belarusian authorities through Russian front organizations, appeared soon after the start of the campaign activity. There are two arguments in support of this idea:

— There is no specific information about the sources of campaign financing;

— The leaders of the campaign visited the Administration of the President during the election period.

In our opinion, in this case it is a struggle within the Belarusian opposition, which has traditionally used two techniques aimed at discrediting opponents: the charge of appropriation of money allocated for political activities or connection with Belarusian security services.

The personality of Mr. Suzdaltsev is quite interesting. He positions himself as an expert having extensive contacts with the Russian government and associated with the intelligence service of the neighbouring country. Not being able to comment on the second fact, relatively to the first one we can confidently say that the level of communication of Mr. Suzdaltsev with Russian authorities is greatly exaggerated.

It is also significant that the main information channel for the statement of Mr. Suzdaltsev has been Internet-media controlled by the UCP, the leaders of which have not very good relationships with “Tell the Truth.”

Another opposition structure, the campaign “Our Home” showed a new format of the effective pressure on the government — targeted mailing of agitation materials to police officers. The authorities’ response was too nervous. To our mind this is connected with the fact that law enforcement agencies rely on the anonymity of their actions in conflicts with the opposition. Targeted mailing is an effective element of psychological pressure, as it is the evidence of sufficient awareness of the opponent and his capabilities.

On February 20, 2012 the beginning of the campaign “People’s control — for honest elections” was announced.  In the framework of the campaign BPF, Movement “For Freedom” (hereinafter referred to as MFF) and the Belarusian Party “The Greens” plan to prepare volunteers for the nomination in the election commissions to work as observers. It’s necessary to not, that this initiative has actually “branched off” from the campaign “For fair elections”, that is already running. In our opinion, the reason for that was the conflict between the MFF and one of the leaders of the campaign “For Fair Elections” Mr. Kornienko.

It is doubtful that the campaign “People’s control — for Fair Elections” will be successful. The point is, that its potential only looks impressive: a large part of the BPF members are at the same time the members of MFF, “The Greens” can be only considered as a “virtual power”, which was shown by the election campaign in 2010. Rather, the new initiative is related to the desire to obtain new sources of funding for the participants and to compete with political opponents, working within the campaign “For Fair Elections”.

Economic situation. The situation has not changed in February. The country has achieved comparative macroeconomic stability both in domestic and external sector, which is largely due to agreements with Russia on oil and gas issues. At the same there’s no enough sources to provide the desired economic growth. The situation is also exacerbated by the need for tough policy in the face of external debts in the coming years. The policy of structural reforms of the economy is still not discussed widely and has no actual plan.

In February, first statistics of the economy in early 2012 were announced. And the stats were better than expected by the expert community. In general, the positive stats were achieved because of various factors: both purely macroeconomic and connected with special calculation of certain factors.

Thus, contrary to expectations voiced in the previous analysis, the GDP growth for January 2012 in comparison with the same period last year was 3.6%. However, this figure does not show an increase in economic activity and has a number of methodological reasons related to the following factors:

— A sharp increase of production of oil products (the increase by 73.2%, which is due to the low level last year, because of the absence of Russian oil deliveries to Belarusian refineries in the first half of January 2011);

— A significant increase in housing construction (in January 2012 the area of houses constructed increased by 106.6% in comparison with January 2011). This indicator is not evidence of economic growth in this sector, but it shows the value added, accumulated over the entire period of the houses construction;

— A significant increase in the cost of finished products stocks (increased by Br 3.5 trillion, or by 10% of the size of monthly GDP).

At the same time, there was a significant drop in the production of potash fertilizers (15.3%), while exports to that position fell by 46.4% in monetary terms and by 40% in volume. The overall situation in the global potash market (which is the second position of Belarus export after oil and petroleum products), is getting worse, as predicted by industry experts: the market is saturated and customers are beginning to speculate for the fall.

The foreign trade in January was quite successful, which shows a positive balance on goods in (about USD 126 million). At the same time, a detailed study of data on foreign trade allows to identify the factors that may have a negative impact on the economy in case of certain development of the situation. Thus, in January 2012 an anomalous increase in supply to some countries (Latvia, the Netherlands) of “composite solvents and organic diluents” (125 times increase to USD 312 million). Taking into consideration the traditional trade relations with the Netherlands (the predominant sale of petroleum products to this country), according to some expert analysts this increase is connected with an attempt of Belarusian suppliers to avoid returning the export duty on oil products to the Russian budget. If this assumption is true, a conflict between Belarus and Russia, connected with the Belarusian authorities’ attempt to avoid the fulfilment of obligations by the manipulation with customs information, is highly possible in the near future.

The first months of the year have shown that the economic authorities continue to pursue tight monetary policy.

Declining inflation (1.9% in January and supposedly about 1.7% in February) and the stability of national currency against the background of high rates on money market at the end of January (about 58-59% in the interbank market and about 50-55% in the deposit market) significantly increased the speculative attractiveness of ruble assets. Speculative activity has led to the strengthening of Belarusian ruble, and the growth of ruble liquidity because of the National Bank interventions, aimed at curbing the growth of the national currency. As a result, the National Bank was forced to begin to struggle against excessive ruble liquidity quite actively.

In February, the government announced a tentative list of objects of state property to be privatized as part of commitments to the AF Community, the total value of which is USD 2,5 billion. In this list there were such strategic assets as BelaAZ, MAZ, refinery oil factory “Naftan” and oil pipeline “Druzhba”. However, taking into consideration the tendency to prolong any negotiations on the sale of state-owned objects (the story with MAZ lasts more than a year), it is not possible to assess the real intentions of the authorities.

At the same time due to the deterioration of foreign relations with the EU countries the probability of signing a new loan agreement with the IMF, which is essential to overcome the peak of payments on external public debt in 2013-2014, is very small. This fact is an additional constraint of the possible actions of the Government.

Measures to implement structural reforms in the beginning of the year again remained just statements and intentions. Thus, the government announced the beginning of development of the industrial policy aimed at changing the structure of the economy: the deallocation of 280 thousand workers of the traditional industries with low added value and providing them with jobs in other industries in 2015. However, even approximate direction of the industrial policy has not been announced. The claims about the creation of large holding companies on the base of state-owned companies continued, and even the legal framework for the process started to be developed. However, no holdings have been established at the moment.

The situation in the field of national security and defence. February proved to be eventful. It can be called Personnel month: the personnel shakeup in the law-enforcement agencies continued, while the authorities were forced to admit staff shortage there. And the problem appeared because of inadequate fiscal policy: for many years the monumental ice rinks and extremely expensive entertainment events (with the dubious artistic value) were more important , than national security. But everything has its consequences and it seems that it’s time to pay for the inefficient use of resources in the past: the first warning of this is the fact that Belarus lost its attack power — bomber aircraft. The old planes can’t be replaced because of the absence of funds.

The situation with the staff shortage seems to become so critical that government doesn’t want to keep silence about it. On February 6, 2012 Alexander Lukashenka met with leaders of the Prosecutor General’s Office, the Security Council and the Ministry of Defence. The most important of the issues raised were the staff shortage problem and the issue of money allowances of military servicemen.

Lukashenka complained about the difference in the level of salaries of servicemen in Belarus and in Russia and said about the possibility of obtaining financial assistance from Moscow, which would help to raise the salaries of Belarusian military servicemen. This was followed by the order to study the issue of increasing allowances for staff of all law-enforcement agencies.

The situation with funding of Belarusian Army have almost become “surreal”: if free supply of weapons is understandable, as both countries are in a formal defensive alliance, the proposal of Alexander Lukashenka to Russia not only to arm, but also maintain the Belarusian army, is an outright political suicide. In this case there is a question of viability of the regime, that is unable to pay for its own security.

However the words of Alexander Lukashenka shouldn’t be appreciated literally. The fact, that Russian President Dmitry Medvedev is ready to provide financial support to Belarusian Defence Ministry, is doubtful due to the fact that Medvedev is actually resigning from his post and is unable to take such obligations. Especially, taking into consideration the fact, that his appointment to the position of the head of the Russian Government is not 100% probable. It is more logical to discuss this issue with Mr. Putin.

In our opinion, all this indicates that the statement of Alexander Lukashenka about financing Belarusian army by Russia was targeted at the internal information field, and it probably had nothing to do with the subject of negotiations that took place in Sochi. And taking into consideration the end of Medvedev’s term in office, we can assume that his meeting with Alexander Lukashenka was purely ceremonial and couldn’t result in far-reaching decisions. At the same time, we note that Russia’s resources, being really significant, however, are limited and can’t allow solving even Russian domestic problems.

On February 13, 2012 the Investigation Committee (hereinafter referred to as IC) announced the fact that in during a criminal investigation against the former Deputy Minister of Internal Affairs Mr. Poluden it was found out, that he had “systematically received money from officials of the Ministry of Internal Affairs over a long period”. Meanwhile, according to this information it cab stated, that for a long time in the Interior Ministry there was a criminal pyramid, when the subordinate ranks of the Interior Ministry paid for misprision of their illegal activity to the higher officials. It’s also necessary to note, that previously there have been unsuccessful attempts to bring Mr. Poluden to book. The fact that these attempts were not successful, is, in our opinion, the evidence that he was not the “head” of the crime pyramid. The fullness of a criminal investigation will be fundamentally important here.

If the only result is the prosecution of Mr. Poluden, it would mean that there is no independence and integrity of IC and the corruption still takes place in the Ministry of Internal Affairs. This will result in further degradation of the main law-enforcement agencies of the country, which threatens with the paralysis of the entire policing system. Previously, we have repeatedly pointed out that the system of government (both civilian and military) requires massive anti-corruption purges. However, it is doubtful whether the authorities can do this because there’s nobody, who can replace the corrupt officials. It should also be noted that in the absence of “staff reserve” the purges hypothetically lead to partial paralysis of government. The fight against corruption in the system of government can not be the end in itself, although it’s really deplorable.

It should be part of a conceptual plan for the modernization of public administration, the ultimate aim of which should be to create a highly professional official body. And this can be done only by restoring the prestige of public service. However, in the absence of intra-national unity about the legitimacy of the existing political regime, the possibility of carrying out the necessary reforms is small. Rather, there will be only some demonstration trials, removals from office, some attempts to consolidate top bureaucracy and the range and half-hearted measures to improve the material security of the officials. This is unable to lead to a fundamental improvement in the management quality (including state security), which, in the situation of complete absence of allies and the growing external pressure, is very dangerous for the regime and for the nation in whole.

The State Military-Industrial Committee of Belarus (hereinafter referred to as SMIC) continues to make steps forward in order to complete previously articulated goals to promote its products in overseas markets and expand international scientific and industrial cooperation. The visits and participation of agency enterprises in 23 international exhibitions of arms and military equipment is scheduled for 2012.

On February 14-15, during the exercises of 465-th missile brigade, the combat tactical missiles “Point” were launched for the first time in the last decade. In addition, the artillery trained fire control at a maximum distance. Correction of fire and control of the shooting was carried out by drones, which 927th center of training and control of unmanned aircraft systems of the Air Force and Air Defense Forces is armed with. The most important of these exercises is the fact, that Belarusian military servicemen have shown high professionalism, which, despite chronic underfunding, allows them to keep weapon systems, that are rapidly going out of date (both morally and technically), in operational readiness.

February proved to be rich in reshuffle in the country’s Defence Ministry. On February 17, 2012 Alexander Lukashenka made a number of appointments in the Ministry of Defence. The most interesting here is the appointment of Colonel Matrashilo to the position of Head of the Territorial Defence — Vice Chief of Staff. It’s necessary to take into consideration the fact, that the development of a system of territorial defence is a priority for military construction for the current period.

On February 20, 2012 the removal from office of the Commander of the Air Force and Air Defense Forces Major-General Lemeshevsky and the appointment to this post of Major-General Pokhmelkin, who previously was the head of the Western operational and tactical command of the Air Force and Air Defense, was announced. The reason for the removal of Mr. Lemeshevsky is still unknown. The statements, that the reason was his involvement in certain criminal scheme, organized by the former commander of the Air Force and Air Defense Mr. Azarenok in order to purchase property without a tender, is a blatant speculation and can’t be proved. It should be noted that such a scheme of causing financial loss to the state is not possible without the participation of the relevant financial authorities of the Ministry of Defence. Meanwhile, the circle of the accused in the criminal case was originally restricted to Mr. Azarenok and entrepreneur Mr. Mashkautsan.

Moreover, it’s necessary to pay attention to the legal part of the case: Mr. Azarenok was convicted under Art. 430 of the Penal Code for taking bribes on a large scale, and A. Mashkautsan was convicted under Articles 16 and 430 for aiding and abetting in the bribery on a large scale. However, no person has given a bribe (Article 431 of the Penal Code), at the same time there is no information about the exemption from liability of such person, if they voluntarily reported about the crime to law-enforcement agencies. Thus, the scheme announced by law enforcement agencies is incomplete, and therefore, questionable.

In addition, there are rumours of possible changes in the number of law enforcement agencies, the most interesting of which is the appointment of the SMIC chairman Mr. Gurulev to the post of Minister of Defence. He previously headed the General Staff. It should be noted, that the probability of this is very small, because Mr. Gurulev has close connections with Mr. Sheiman. There is also information about the possible appointment of First Deputy Chairman of the KGB Major-General Wegera for the post of Minister of Internal Affairs. The possibility of the appointment here is even smaller. Rather, it can be expected that the Belarusian militia will be headed by Mr. Shunevich. However, these rumours may be a sign of approaching reshuffle in the law-enforcement agencies. At the same it should be noted that now the human resources of the authorities are the lowest for the entire period since getting independence.

On February 21, 2012 there was a press conference of Minister of Defence Yuri Zhadobin. In general, the head of the Minister of Defence tried to setup optimism about the future of the Belarusian Army. But, unfortunately, if you think over the information provided by him, there is no reason for such optimism. Going into service of a division of anti-aircraft missile systems (hereinafter referred to as ASM) “Tor-M2” indicates only a small capacity of the military department for rearmament (even taking into consideration the concessions provided by Russia): such set of ASM’s should go into service every year.

Prospects for increasing of defence budget share, allocated for the development, up to 30% means nothing: it is necessary to determine the minimum proportion of GDP allocated to the defence. Preserving it at the same small level today makes military construction and development impossible.

Mr. Zhadobin underlined the fact, that military training sessions were passed by 4500 reservists. But it should be noted, that if the Armed Forces in time of war count 500 000 people, such number of reservists should be prepared not annually, but monthly.

The claims that the system of territorial defence is able to answer modern security challenges can be taken seriously only if these challenges are coming from Russia or Ukraine. In the situation of confrontation with NATO territorial defence in its current form is useless.

Speaking about the fact, that flying time of military aircraft pilots in 2011 increased by 39% compared to 2010, like it’s a great achievement is not right: according to our information, the bombers (35 planes Su-24) haven’t flew at all last year.

In the situation with the write off of the Su-24 should be dwelled on more precisely. The planes were withdrawn from service because of their age. At the same time the possibility of their modernization hasn’t even been considered, although Russia intends to maintain them in service until 2020. Algeria also upgrades the armament of the Su-24 to the level of MK2. Trying to mitigate the situation by stating that the Belarusian Park of Su-24 if “small” is quite surprising, since 35 of these aircraft have been exactly 20% of the war strength of Air Force (175 planes, including 23 Su-27, 41 MiG-29 and 76 Su-25). Thus, Belarus has 140 warplanes. And not all of them are usable now.

Loss of 20% of Air Force combat fleet during the year is to be called degradation, which was a logical ending of chronic underfunding of national defense. According to unconfirmed information Belarus appealed to Russia to consider the sale of Su-34 bombers. However, it’s necessary to understand that the supply of new planes even to the Russian Air Force is not fast. In addition, the restoration of the bomber air fleet will cost at least USD 1,1 billion. And Belarus simple doesn’t have such money. And that’s just the cost of the planes. If the funding of the Ministry of Defense does not improve in the next 2-3 years, then Mig-29 will be the next “candidates” for write-off.

Regarding the possibility of replacing the Su-24 by 18 fighters Su-30, previously serving in the Indian Air Force, it can be said, that such substitution will be neither sufficient (due to a small number of Su-30) nor full (fighters and bombers are different kinds of planes and training of their pilots is significantly different).

It is necessary to dwell on the priorities of the military department of the current year, stated at the press conference. The most interesting are three of them:

— Territorial defense;

— The introduction of unmanned aircraft systems (hereinafter referred to as UAC), produced in Belarus;

— Ideological work among the troops and the population.

We plan to devote a separate article to the issue of territorial defense in March, but the two latter tasks should be dwelled on in more detail.

The tests of the first Belarusian military UAC are scheduled for the second half of this year. At the moment, the infrastructure for maintenance of the UAC is created, and the Russian short-range systems are purchased. On February 21, 2012, the first test flight of Belarusian UAC “Grif-1” was held. The flight lasted 10 minutes in normal mode. In whole, Belarus has sufficient technological groundwork for independent work on unmanned aircraft. The weakness is the lack of Belarusian engines – at the moment it is planned to install at Belarusian UAC German motors, which have already been purchased.

Speaking about the ideological work, it should be noted that it isn’t likely to be success because of the absence of state ideology as an adequate and modern product, low levels of trust to the authorities and the decrease of incomes after last year’s financial crisis. No ideology and patriotic appeals is an adequate substitute for material reward and social welfare for work in law enforcement agencies, where there is an outflow of young professionals and staff shortages.

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