Belarus Watch Briefing. Issue #11

August 31, 2021
Read a new issue of bi-weekly newsletter with monitoring of Russian activities and influence in Belarus to know more.
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Recent policy developments

Bellingcat on the death of Belarusian activist Vital Shishov: FSB agents infiltrated into the Belarusian opposition structures in Ukraine

On August 2, Vital Shishov, head of the Belarusian House in Ukraine, went missing. Later he was found dead in the park near his home in Kyiv. Ukrainian police launched an investigation, examining among other versions a murder masked as a suicide. Several weeks before his death, Shishov raised concerns that he was stalked by alleged agents of the Belarusian special services.

According to Christo Grozev, head of investigations at Bellingcat, there is evidence that the  FSB agents infiltrated the Belarusian opposition groups in Ukraine. Grozev also added that Bellingcat will dedicate all their resources to investigate the death of Vital Shishov.

As for the reaction of the Russian media, RT published an article about Shishov's death, disseminating an allegation of his connection to Neo-Nazis and arguing that the opponents of the regimes "are automatically elevated to a "sort of 'saintly' status".

Currently there is no further information on the investigation findings on Shishov's death. At the same time, the very statement by Bellingcat on the infiltration by the Russian agents of the Belarusian opposition is significant.

In the past months, the Belarusian and Russian special services publicly stated that the agencies closely coordinate their work. In June, the Director of the Russian Foreign Intelligence Service Sergei Naryshkin and Chairman of the State Security Committee (KGB) of Belarus Ivan Tertel held a meeting in Vitebsk and agreed "to counter the aggressive policy of the West". In April, Russia's FSB and the Belarusian KGB conducted a joint operation in Moscow, capturing the Belarusian political analyst Aliaksandr Fiaduta and the lawyer Yuras Zyankovich, accusing them of a coup attempt against Aliaksandr Lukashenka. Following the Ryanair incident in May, the governments of Poland and Lithuania raised concerns about the safety of the Belarusians who fled the regime to the respective countries. In the Ryanair plane diversion investigation, Greek intelligence reported that in Athens Raman Pratasevich was followed by three unknown agents, who carried either Belarusian or Russian passports. In the past months, several Belarusian activists in Lithuania reported on their social media that they are followed near their homes by the alleged agents.

As for the work of the Belarusian special services to intimidate Belarusians abroad, it is no secret: the Belarusian KGB has been continuously following Belarusian activists who met with foreign NGOs in the neighbouring countries during the years that preceded the presidential elections 2020.

It is rather predictable that in the midst of the political crisis and massive relocation of the Belarusian opposition, the regime redoubled its efforts and increased surveillance abroad as well. At the same time, if Russian involvement is confirmed, this would indicate large-scale support from the Kremlin for the Belarusian regime on that front and could lead to more sophisticated and more ambitious scope of intelligence operations targeting the Belarusian democratic opposition in the future.

Head of the Belarusian group on integration negotiations: almost whole package of the integration documents is synchronized

On August 17, Mikalai Snapkou, the first vice-premier and head of the Belarusian group in the Russo-Belarusan integration negotiations, reported on the progress of the negotiations. Snapkou mentioned the hardship of coordinating the diverse interests of the two states. According to Snapkou, the Belarusian side is primarily interested in energy issues and access to Russian markets, while the Russian side prioritizes the transparency of tax and customs regulations. In response to this report, Aliaksandr Lukashenka stated that the Supreme State Council meeting of the Union State should take place by the end of the year, where the Union programs should be signed.

The major Belarusian state news agencies such as Belta routinely fill the politics section with news about integration talks and constitutional reform.

The news reports on both projects are rather vague and uninformative, which many perceive as an attempt to fill an information vacuum rather than to provide a factual update on political developments.

The progress on the integration programs remains slow and unclear. Thus, in April the prime ministers of Belarus and Russia announced that 26 out of 28 roadmaps were already harmonized. The news piece on Belta on August 18, which quotes the report by Mikalai Snapkou, contains a similar message, reporting that "Belarus and Russia almost fully agreed on the package of the integration documents".

As in recent months, there remains little clarity on the actual content of the integration programs.

Other remarks by Lukashenka indicate that the meeting of the Council would likely be rescheduled for a later date, which suggests that there are still unsolved issues which led to the rescheduling the initially planned meeting of Putin and Lukashenka on that matter in the Fall.

Energy and economy

Mutual trade

Belarus has a trade deficit of $3 billion with Russia. The authorities have summed up the results of commodity trade for the last six months. The negative balance has almost tripled. The first preliminary information for the last six months became available at the turn of July and August. In general, the commodity trade deficit amounted to $1.2 billion USD.

A trade deficit for goods is normal for Belarus. Previously, it was covered by a surplus in foreign trade in services. In recent years, there has been a tendency to oust Belarusian goods in the consumer market.

The volume of mutual trade in goods amounted to $14.8 million USD in January-May 2021. Belarusian export to Russia totaled $6 million USD, while imports from Russia totaled $8.8 million USD.

Economy

According to Belarusian and Russian economists, cooperation with Russia accounts for more than 50% of Belarus' GDP.

Russian investment in the real sector of the Belarusian economy (excluding banks) amounted to $3.5 billion USD (41% of the total investment in the Republic) in 2020. Belarusian investment amounted to $3.2 billion USD (66% of the total). 25% of the assets of the banking sector of the Republic of Belarus are secured by Russian capital.

According to the Ministry of Finance of Belarus, Russia accounts for 57% of the external public debt of the Republic ($10.7 billion USD), China - 17% ($ 3.2 billion USD), Western creditors - 15% ($2.9 billion USD) in 2021.

Investments

From January to June 2021, foreign investors contributed $4.9 billion USD to the real economy. The major investors were economic entities of the Russian Federation (45.3% of all inward investments), Cyprus (13.8%) and Ukraine (7.7%). Foreign direct investment was $3.6 billion, or 73% of all foreign investment.

Loans

The Eurasian Development Bank (EDB) has consolidated in its new strategy for 2022-2026 plans to partially replace the investments of international financial institutions in the Belarusian economy that are falling due to Western sanctions of $1.5 billion USD.

At the end of 2020, the EDB's investment portfolio in Belarus amounted to about $1 billion USD, including $500 million USD in emergency financing to pay off the debt to Gazprom in the fall of 2020.

If to take into account the servicing and repayment of EDB loans, a total of $1.5 billion USD over the next 5 years does not seem that significant.

According to O. Andrey Shirokov, executive director of the EFSD project department, the Belarusian government and the Eurasian Fund for Stabilization and Development are discussing a new loan with the Belarusian authorities. He recalled that in 2020 the EFSD provided emergency funding in the amount of $500 million USD to support Belarus in the context of the coronavirus pandemic.

Banking

According to "Nasha Niva" sources, preparations for the sale of "Belgazprombank" are underway. The Russian Moscow Credit Bank has expressed interest. Gazprombank has allegedly agreed to sell its daughter company because it "does not see the point in owning a bank that cannot function properly. "Two months ago, on May 27, Alyaksandr Kaznacheyeu, Deputy Chairman of the Board of the Moscow Credit Bank, became a member of the Board of Directors of Belgazprombank. As chairman of the audit committee, he received all the audit documentation of "Belgazprombank". According to Nasha Niva sources, the parties are currently unable to negotiate the price.

Earlier, Bloomberg had accused Moscow Credit Bank of helping Rosneft to circumvent Western sanctions (Rosneft cannot raise funding for more than 30 days). The mechanism was as follows: MKB Bank performed the functions of a legal intermediary and sold its bonds in Western markets, and then allegedly lent long-term loans to Rosneft.

Logistics

On August 13, the head of the Cabinet of Ministers Roman Golovchenko said that Belarus will be fully ready to transship potash fertilizers via alternative routes by December. Golovchenko added that close contacts have already been established with Russian partners: "Logistic subtleties associated with vessels of a certain type, warehouses, storage facilities are being studied". Among the options being considered, he named the ports in Murmansk and the Leningrad region.

According to Pavel Ivankin, the head of the Institute for the Study of Railway Transport Problems, the management of Russian Railways invites discussion surrounding the issue of increasing tariffs for goods from Belarus.

Russian Railways used to make discounts to Belarusians, but due to the situation when the Baltic states were closed to them, the company may impose tariffs due to its semi-monopoly position.

Presumably, the discount can be removed as early as in 2022.

Payment systems

To further improve mutual settlements in the Union State, banks and shops in Belarus will be obliged to accept Mir payment cards from January 1, 2022, the financial regulator of the Republic of Belarus informed. On July 23, the press service of the National Bank explained that this is stipulated by decree No. 197 "On the circulation of bank payment cards and the functioning of software and hardware infrastructure". According to the National Bank, due to the completion of the project on the intersystem integration of the BELKART payment system and the Mir payment system, banks participating in the BELKART payment system are required to accept bank payment cards of the payment system for servicing Mir "in all payment terminals in trade (service) organizations, payment terminals in cash withdrawal points, ATMs and newly installed self-service payment terminals" from January 1, 2022.

During a meeting of the High-level Group of the Council of Ministers of the Union State, an agreement was reached on the early completion of work on the mutual disclosure of the payment infrastructure, given that today cards of the Mir payment system are accepted in 90% of devices on the territory of the Republic of Belarus, and the Russian infrastructure is fully ready to accept cards of the "Belkart" payment system, issued using the technology of the "Mir" system.

Telecommunications

The development of digital integration between Russia and Belarus is being implemented within the framework of the Union State and the digital agenda of the EAEU. The launch of an electronic product traceability system allowed the parties to exchange information on the origin of products, suppress the supply of sanctioned goods, and minimize the number of restrictions for Belarusian enterprises. These measures ensure a stable position for Belarusian suppliers in the Russian market. According to Rosselkhoznadzor, the share of counterfeit food products on the Russian market has decreased by 90%. Telecom operators of Russia and Belarus reduced (in test mode) the roaming tariff from 0.3 to 0.015 dollars per minute from November 1, 2020. This made it possible to significantly reduce the cost of communication for subscribers in the two countries.

The Russian telecommunications operator Ufanet Group (Ufanet is a telecommunications operator, as well as a system integrator on the territory of the Republic of Bashkortostan, the Republic of Tatarstan, the Orenburg region and the Nizhny Novgorod region) is ready to cooperate with the Belarusian enterprises of the Ministry of Communications and telecommunication operators. Interest in this was expressed during a meeting of company representatives at the Ministry of Communications and Informatization of the Republic of Belarus on July 27, 2021, the press service of the ministry reports.

Public Administration

The Russian ambassador met with the leadership of the Mogilev region

On 2 August 2021, Ambassador Extraordinary and Plenipotentiary of the Russian Federation to Belarus Yevgeny Lukyanov met with the leadership of the Mogilev region. During the meeting, he stressed the importance of regional cooperation, which is largely "due to the sanctions," assessed as a successful trade collaboration, joint business and construction projects. At the same time, the Belarusian counterparts emphasized certain problems associated with the Rospotrebnadzor bans on Belarusian products. Ambassador Lukyanov's working visit to the Mogilev Region lasted three days and included visits to industrial enterprises and local attractions.

The Russian Embassy and its Ambassador are active in Belarus, organizing and participating in meetings with government officials at various levels. Such meetings are largely formal in nature, but at the same time, projects of joint economic and other activities are discussed, which contributes to strengthening ties between Russia and Belarus.

Military and law-enforcement agencies

Military exercise "Zapad 2021"

The forthcoming joint military exercise "Zapad 2021" have created an atmosphere of nervousness both within analytical circles and among politicians. In particular, some analysts claim that Russian forces could use the chance for an attack by Western neighbours of the country to simply remain in Belarus, hereby de facto occupying it. The main fears are instilled by the current conflict of Lukashenka with Lithuania and Poland, and his determination to raise the stakes, creating the image of Belarus as a besieged fortress.

For the first time, there is a likelihood of an armed conflict because of hostile relations between both sides and not because of their malicious intentions. The crisis in Afghanistan has become another factor to be taken into account.

Migrants crisis in Lukasenka use

The Taliban's capture of Afghanistan's capital, Kabul, has become a hot topic on the lips of analysts, who have hypothesised how this could influence Belarus. Given that Lukashenka has been actively using the developing migrants' crisis as the instrument in the hybrid war against Lithuania, the export of the terrorist threat has become one of the much-feared possibilities. At the same time, some analysts claim that, on the contrary, this decreases the chance of Russia's active involvement in Belarus because it is too difficult to lead military actions on two fronts.

As for the participation of Belarus in Afghanistan via the Collective Security Treaty Organization, this seems to be a losing situation. On the one hand, the participation of Belarusian soldiers in the distant war could further negatively impact Lukashenka's rating, on the other, if no military contingent will be sent to Tajikistan borders (where Russia has its military bases), the value of the organisation will be put in question.

Church

Belarusian Orthodox Church signed a cooperation agreement with Brest regional authorities

On August 17, 2021, the Brest Regional Executive Committee and the Brest and Pinsk dioceses of the Belarusian Orthodox Church signed a cooperation program for 2021-2025. The program was signed by the hierarchs of the BOC and Chairman of the Brest Regional Executive Committee Iury Shuleika. It is already the fourth agreement that provides cooperation between public administration institutions and religious organizations of the BOC in different spheres, including culture, social protection, support to the strengthening of families, upbringing and education, prevention of crime etc. The meeting was attended by clerics of the two dioceses and heads of departments of the regional executive committee.

As a structural part of the Russian Orthodox Church, the Belarusian Orthodox Church actively cooperates with Belarusian authorities at various levels.

The signing of cooperation programs is a formalization and institutionalization of mutual influence of the Orthodox Church and power structures in Belarus, which creates additional ties between them.

This kind of interaction testifies to the strengthening of ties between the Russian Orthodox Church and the government of Alexander Lukashenko, expanding the opportunities for Russian influence in Belarus.

Representatives of the Belarusian Orthodox Church discuss the strategy of cooperation with the Ministry of Education

On August 7, 2021, a series of practical seminars on the strategy of cooperation between the Belarusian Orthodox Church (BOC) and the Ministry of Education of the Republic of Belarus was held in Hrodna region. The seminars were conducted by Archpriest Fedor Povniy. Representatives of the BOC, governing bodies of Hrodna region and representatives of educational departments participated in the event.

The example of this event demonstrates the practices of interaction of the BOC with local authorities in Belarus to implement the agreements concluded between the Church and the Government of the country.

Interestingly, the seminars were led by Archpriest Fyodor Povniy, who is considered the spiritual father (duchovnik in Russian) of Aliaksander Lukashenka. Seminars of this kind show the depth of interaction between the Orthodox Church in Belarus and the authorities.

Internet and Media influence

Fight against independent media continues — BelaPAN employees arrested

Repressions against the independent media in Belarus are unmitigated. Last week law-enforcement agents arrested BelaPAN employees Irina Levshina, Ekaterina Boeva, and Dmitry Novozhilov.

Some experts say that this process has already created many problems for the Belarusian regime across information, public administration, and economic sectors.

First, the eradication of independent media decreases the quality of national journalism and content creation in general, leading to an increased importance of Russian media. Second, the inability to critically assess the events leads to the lack of reliable information necessary for the decision-making processes. As a consequence, the authorities are unable to adequately analyse the events and calculate risks, which leads to mistakes, such as Pratasevich's arrest or the artificial creation of the migration crisis. This further exacerbates the feud with Western countries and synchronously pushes Belarus into Russia's embrace. Third, due to the lack of independent analytics, business is devoid of instruments of effective communication with society and customers, which has a decisive economic impact, lowering the quality of services and goods.

Civil Society

The meeting between the leadership of "United Russia" and "Belaya Rus" will be held in Minsk

Member of the Federation Council, Deputy Secretary of General Council of "United Russia" Andrei Klimov announced a meeting with the Belarusian pro-governmental organization "Belaya Rus". He stressed that the interaction with this organization is carried out due to the lack of the political party-partner in Belarus. It is planned to discuss the development of bilateral relations between Russia and Belarus. A separate meeting with the chairman of Belaya Rus, MP Gennady Davydko, is also expected.

"Belaya Rus" is one of the largest GoNGOs in Belarus, financed from the national budget and uniting officials across different levels. Belarusian GoNGOs actively cooperate with Russian politicians, as evidenced by regular meetings with the latter.

Thus, Belarusian GoNGOs in general, and Belaya Rus in particular, create leverage for Russian influence in Belarus.

Editor of the Russian security journal emphasizes the need for expert cooperation with Belarus

Following Aliaksander Lukashenka's meeting with representatives of the media community, Igor Korotchenko, editor-in-chief of the Russian magazine "National Defense," emphasized the importance of the alliance between Russia and Belarus as "real rather than opportunistic interaction". In addition, he noted the importance of Aliaksander Lukashenka supporing the idea of joint work of Belarusian and Russian experts. Korotchenko said that there is "a dialogue between the states and a dialogue at the expert level is necessary. This will allow us to understand each other better."

Russian journalists and experts often promote Russian foreign policy discourses about the unity of the peoples of Belarus and Russia and the importance of "alliance" between them. They also promote ideas of expanding Russian-Belarusian cooperation along various dimensions, including expert interaction.

It is noteworthy, that such not very substantive statements are cited in Belarusan official news resources (in particular, the Belta news agency).

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