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11th issue of the BISS Trends (July-September 2012)

Experts characterize almost all of the trends under analysis as either “stagnation” or “regress” in the third quarter of 2012. In the political democratization/political liberalization segment, the situation with the administration of election legislation has obviously worsened. There used to be certain relaxation of election restrictions ahead of the elections that took place during the relative liberalization phase (parliamentary elections of 2008, local elections of 2010 and presidential election of 2010); however, the 2012 campaign witnessed a consistent phasedown of previously introduced positive amendments to the election legislation.

When analyzed, the developments in the segment of good governance and the rule of law section also indicate regress: most of the events and facts attest to further centralization of authority and de-liberalization. One indicative example of “manual” administration is resolution No.841 of the Council of Ministers, which made state officials personally responsible for the performance of some enterprises and success of some investment projects.

In the economic sector, the country got back to subsidizing loan rates for the enterprises engaged in modernization projects. The indiscreet fiscal policy of the authorities aiming to stimulate economic growth in the public sector makes monetary policy too heavy a burden for the rest of the economy. Analysts have an impression that the authorities tend to raise state-controlled prices before such an increase is really required in a bid to meet the $500 average wage target and reduce the pressure on the consumer market and exchange rate.

The privatization process has stalled, and the privatization of larger enterprises is considered to be a last resort measure, when it is time “to sell family silver”. It is also indicative that in their Belarus Country Economic Memorandum, which was published in early July, World Bank specialists note: “all main stakeholders are interested in avoiding privatization, even when it is mandated by high level policies and decisions.”

Geopolitically, the apparent tilt towards Russia still remains, although the third quarter saw an increase in Belarusian-Russian tensions. It looks like the Russian administration is putting its ally under pressure again in order to coerce it into meeting its earlier obligations, specifically those related to state property privatization. Russia has announced a significant reduction in crude oil deliveries to Belarus starting the fourth quarter of 2012 (to 4 million tons from 5.3 million tons), which must be a result of the notorious export of “solvents and diluents” that Belarus produced from duty-free Russian crude.

The relations with the European Union remain consistently poor. During the period under analysis, the two main negative developments in the relations between Belarus and the EU were the diplomatic conflict with Sweden and the Belarusian parliamentary elections, which were recognized as neither free nor fair by international observers. At the same time, only two political prisoners were released during the third quarter.

Finally, in the culture sector, ongoing politicization and ideologization of culture life continues amid further depreciation of culture products that constitute the official discourse and increasing polarization of the culture sector of Belarus. The authorities obviously lack consistency and act even more awkwardly trying to make progress with “mild Belarusianization”, a recently outlined tendency.

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