Comment: high oil prices should push Belarus on the path of reform

Комментарий: Дорогая нефть должна толкнуть Беларусь на путь реформ

Lukashenka buys its raw materials at world prices. It is a reason and a chance to urgently start changing the business model of the country and thus for the salvation of the Belarusian sovereignty, says Andrey Gurkov.

Belarus has purchased the Norwegian oil. This high-profile event can be perceived only as a demonstrative gesture of Alexander Lukashenko. They say, “old man” has so far failed to negotiate with Vladimir Putin, another discount on raw materials for the key export sector of the country, so he tries to blackmail Russia, but it still won’t last: Minsk simply not enough currency to pay world prices. So that soon the Belarusian President will have to negotiate with Moscow.

Vladimir Putin calls for accelerated integration of Belarus

Agree on what? The continuation of the scheme at which Russia supplies to Belarus oil at reduced prices, and she sells her products from her, especially gasoline, in the world? Schemes still allow Lukashenka and his entourage comfortably, and the Belarusian people to live relatively well? Seriously doubt its viability.

Signs are multiplying that this scheme has ceased to hold Moscow, there now prevailed the concept of “stop feeding Belarus” in the hope of a mythical geopolitical benefits of the Union state, which for a quarter of a century, often turned out to be ephemeral.

Now Vladimir Putin, strongly grafted this year for the improvement of its place in the foreseeable future and in the history of tough demands of real and accelerated the integration of Belarus into the Russian sphere of influence. To achieve its goals it is ready to redraw and not such schemes. Just look how he is now going ahead, rewriting the Constitution.

Minsk is urgently looking for a replacement for Russian oil. What is the purpose?

Alexander Lukashenko seems to have felt a threat to the sovereignty of their country and thus their power will change the situation. This was evidenced in recent days, the very active efforts of the Belarusian authorities (some might call them convulsions) to urgently find a replacement to Russian oil and ways of its delivery: meeting in Minsk, the negotiations in Kazakhstan, the contract with Norway, an agreement with Lithuania. In this context, to regard the importation into the country of the Norwegian oil?

If the purpose of this action (and expected in the near future similar procurement) is to ensure that, to stabilize the current production of petroleum products, to win some time to prepare fundamental changes in the structure of the Belarusian economy, we organized the arrival of a Norwegian tanker and Lithuanian railway tanks is an undoubted success, even breakthrough.

If we are talking only about trying to maintain the current business model of the country by substituting one raw material supplier for several others, it looks more like a gesture of despair: without cheap Russian oil, it is impossible to save a business model based on cheap Russian oil.

Economic reforms for overcoming oil dependence

The current Belarusian economic model is largely the result of preservation of the structures created in terms of anti-market economy of the Soviet Union. And now Moscow for its intransigence gives Belarus a reason and a chance to finally get rid of this heritage of the USSR, to this day, dooms the country to oil dependence. Moreover, in a short time would still have to do something: by 2025, the so-called tax maneuver of the Russian oil supplies will go on world prices.

In short, Belarus needs today quick and radical economic reforms. It is necessary to start market mechanisms and to give a powerful impetus to private businesses, primarily small and medium, as world experience shows that he is able in a short time with relatively small investments to bring to market innovative products and services that are in demand both in the country and in the foreign market.

As for the early overcome the oil dependence that threatens the political independence of the Belarusian state, then, most likely, will require extraordinary and courageous decisions. For example, the full privatization of the two Belarusian refineries. Let the shipping oil on them becomes a concern for foreign companies (Russian? Chinese? Polish?), and the state will be satisfied with the taxes they will pay.

One can imagine another option. Experts calculate that it will cost Belarus more expensive: long-term purchases million tons of oil at world prices and their delivery into the country by pipeline or closing one of the refineries, with preservation of the social considerations of wages to all his employees until, until they find a new job or retire. And if the second option will be more profitable, especially much more profitable, then why not close the plant?

Authoritarian modernization. Ready to her Lukashenka?

Judging by the statements of the Chairman of concern “Belneftekhim” Andrei Rybakov, who said at a government meeting in Minsk on 21 January that for the domestic market of Belarus would be enough for 80 percent of a single CPU refineries that are already thinking. I have no doubt that Belarusian economists and businessmen will be able to offer the different ways of repositioning your country.

The only question is, who in today’s Belarus is to implement radical market reforms, taking extraordinary and the more unpopular decisions? President Lukashenko? With his style of command-administrative management of the economy? Yes, even in an election year? While this is absolutely unrealistic.

But who knows, maybe the growing pressure from Moscow, the arguments of the Belarusian political and business elite, the positions of which threatens the strengthening of Russian influence, active demonstrations against integration with Russia, Belarusian opposition, as well as the cost of the purchase and delivery of Norwegian and other market-based oil will assure him that for the sake of his power in a sovereign country will have to step on a throat to an own song? In any case, it wouldn’t be the first example of authoritarian modernization of the economy. Another option in Belarus is not yet visible.

Комментарий: Дорогая нефть должна толкнуть Беларусь на путь реформ

Комментарий: Дорогая нефть должна толкнуть Беларусь на путь реформ

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