Country Of Rusty Tractors

How Lukashenka brought the country up to an anchor back in the USSR.

Lukashenka was castigating mismanagement at the meeting, especially in the rural areas. He stated he considers it a crime when they throw away expensive machinery, which worked for only two years, like some metal scraping. It is notable that Lukashenka underlined: you don't need to check private owners in this respect, as “this is their private property, and they know how to handle it properly”. However, he added straight away:

“But how many such owners do we have? I think it's less than one per cent. And all the rest will go around with a stretched hand like beggars, asking, like, please give us money to buy a tractor, as we have nothing to sow with.”

The scenery of a big collective farm

Without realizing it, Lukashenka has painted a clear picture of the Belarusian economic model with a few strokes: it's bureaucratic and soviet-style, in many aspects.

This model used to work quite well in the era of the generous Russian subsidies. Two oil refineries, built under the USSR and hooked on the Eastern pipe from the very start, ensured the wild inflow of currency into the treasury.

The unique status of an oil offshore (or, as some joked, the Belarusian Emirate) allowed to pump huge financial resources into the colossal state sector in the industry and in the rural areas. Both here and there tractors went rusty, they were dismantled into spare parts - that's outrageous, of course, but screw you, let it be so - take new ones. The sowing campaign is sacred anyway, the struggle for the harvest, all that.

However, the integration love is gone, roses are no longer red, violets no longer blue. Today, the angry Moscow, the imperial ambitions of which Lukashenka now openly discloses, does not want to sell cheap oil, and generally turned it's back to the needs of the integration partner. No huge money can be found to support the big collective farm - this is how a major part of the Belarusian economy can be characterized.

Belarus has no safety net

Belarusian Prime Minister Siarhei Rumas, meanwhile, was optimistic that the drop in oil prices in the world is “creates an additional opportunity today to negotiate with the Russian Federation”.

Yes, this collapse can probably soften the position of the Russian oil companies. But if you look further, the continuation of the current trend can undermine the Russian economy itself.

Moscow, however, has a safety net. The Ministry of Finance of the Russian Federation reassures fellow citizens: even with an oil price of $ 25-30 per barrel, the National Welfare Fund (and over $ 150 billion is accumulated there) will be enough “to fulfill all the obligations of the state and maintain macroeconomic and financial stability” for another six to ten years.

But the Belarusian government cannot boast of such reserves for a rainy day. In January-February, the country's gold and foreign exchange reserves, already not so enviable, fell by 588.6 million dollars to 8.8 billion dollars. And the state still needs to pay off the debts, external and internal.

Does the chieftain have a program?

In short, the Belarusian model, tied to oil and Russia, in the current turbulence (starting from oil conflicts with its eastern neighbor, and ending with the world collapse in oil prices right now) immediately showed its vulnerability.

Belarus’s GDP fell by 1.9% in January alone, and there are no prerequisites for the growth of this indicator. But if the GDP for the laymen is a vague concept, then they react immediately to the numbers in the currency exchange offices. Meanwhile, the Russian ruble, falling, pulls down the Belarusian ruble. The exchange rates of the dollar and euro in the Belarusian currency exchange offices have gone wild today, the population is uptight.

It is especially unpleasant for Lukashenka that all this fuss is happening before the presidential election, which must be held no later than August 30. The electorate wants to hear how the country will survive without the usual Moscow recharge.

Oil refineries will no longer save the economy

Yes, at the recent oil meetings, Lukashenka is talking more and more clearly about the oil alternative, forcing his subordinates to seek long-term contracts with other suppliers, to think about building infrastructures for this (such as a pipe from the Baltic ports).

However, behind these instructions there is a hope to return the status quo in oil refining. So that it would still give the treasury pretty profits. Although independent economists admit that refining oil in previous volumes will in principle become economically unprofitable.

This means that we should bet on structural reforms in the economy today (and in a good way even yesterday).

True, the IMF mission, which has long been pushing the Belarusian authorities for such reforms, according to BelaPAN, postponed its visit to Minsk scheduled for March because of the coronavirus.

From copper timpani to going down the drain

Here it is already so hot that even without the urging of the IMF it is time to carry out the urgent eradication of the soviet style in the economy. However, what do we hear?

At today's meeting with the leadership of the Council of Ministers, Lukashenka, speaking of a barbaric attitude towards technology and calling for “striking at mismanagement,” did not fail to emphasize that “there is no need to have any market reasoning here.”

Lukashenka focuses on improving the system of state supervision of the technical condition of tractors, trailers, self-propelled machinery and equipment. Except that he calls not to inflate the number of inspectors: “We have enough local controllers ranging from the chairman of the district executive committee to the chief of police”.

To strike at mismanagement, to strengthen accounting and control — these slogans also sounded like refrain at the congresses of the CPSU. But the Soviet model lost the competition to the western structure of the economy.

In exactly the same way, the epigonous model of Lukashenka, founded on the Soviet base, is collapsing today. But he stubbornly keeps silence about structural reforms.

The conservative leader brought the country up to an anchor in the USSR for a quarter of century. However, the saddest thing is that he is in no hurry to leave the soviet harbor even now, when everything is already threatening to go down the drain.

Aliaksandr Klaskouski, Belsat