Page 60 - BNE_magazine_10_2020

60 Opinion
bne October 2020
EEU that is not fully exposed to political risks within Russia itself. This is an inevitable consequence of trading off institutional sovereignty for closer economic and monetary union, which will also require some level of political integration.
Moreover, there are considerable economic risks, as the Russian economy itself is beleaguered by chronic and structural weaknesses. In recent years, Russia has failed to overcome its weak growth trajectory, reducing the long-term attractiveness of economic and monetary integration. By way of comparison, the Eurozone might not have survived the 2010s had Germany not successfully healed its “sick man” status in the 2000s.
Nonetheless, the Rublezone scenario is likely to enable Belarus to muddle through economically over the coming years, even if it enters with weaker structures. Yet while there is clear logic for such an arrangement in the short to medium term, its economic sustainability is questionable in the long term absent deeper political integration.
The Euro area crises proved that integration within a currency union is not necessarily irreversible, as did the breakup of Yugoslavia. Yet in order to do this successfully, strategic preparation with other important economic partners is necessary, as Slovenia and Croatia demonstrated. The improvisational approach of Greece in 2015 showed how easy it is to get it wrong.
Reaching the highwater mark
As it floats listlessly on the periphery of a Rublezone that is unlikely to be underpinned by a fully fledged political union, Belarus may find itself drifting away from Russia in the
longer term. The tides will be economic, but also political. By keeping Lukashenko in power, Moscow will be threatening the goodwill of much of the strongly pro-Russian public, planting the seeds for instability further down the line.
The opposition is unlikely to simply vanish, even if Lukashenko has its leaders arrested or Moscow plays divide-and-rule with the factions that are likely to emerge. The protests have permanently
undermined Lukashenko’s authority, eroding it to a final line of defence that is provided by the security forces and Moscow. Whether the opposition are forced underground, or a tentative consensus is reached, Belarus is likely to shift away from its system of centralised governance to a stakeholder model.
This is not necessarily incompatible with Russian objectives, but Moscow must first stabilise the situation with a view to preparing the ground for the post-Lukashenko era. Moscow was comfortable with the institutional autonomy that Belarus enjoyed under Lukashenko; although the president is erratic, he is
a known quantity who knows which side his bread is buttered. If
“The protests have permanently undermined Lukashenko’s authority, eroding it to a final line of defence that is provided by the security forces and Moscow”
a new consensus is to emerge which is more pluralistic, Moscow must first reduce the scope that Belarus has to wander off-piste. Co-opting stakeholders, capturing institutions, shaping public discourse and increasing interdependence are key strategies to this end, but they take time and require that the pace of events be slowed. Creating a Rublezone, or at least a roadmap towards such a setup, would be a logical step in this regard.
Yet the strategy is a high-risk one given that the Belarusian public, who so clearly want change, are likely to associate Moscow with the violent intransigence of Lukashenko. The risks of political instability and civil unrest are unlikely
to dissipate even if they are dampened, which creates the possibility of a more radical break between Belarus and Moscow and abandoning the Rublezone altogether.
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Contents
Top stories
Russia’s top retail and tech companies join forces to hunt for innovations in the rest of the world 2 Ukraine-born startups raised more
than half a billion dollars in 2019 4 Russian video streaming platforms
gain speed 5 Cloud services take off in Russia 6 SEMrush to SEO success 8
Leaders 9
Russia’s internet giant Yandex
announces growing and more
diversified revenues in 2019 10 Russian telecom major Rostelecom misses on earnings in 4Q19, cash
flow solid 12
Investment 13
World Bank approves $35mn project
to modernise Kyrgyz tax administration and statistical system 13 Romanian online home decoration
retailer raises €3.5mn in bonds 14 Russian billionaires Abramovich, Gutseriev, said to invest in Telegram
crypto project TON 14 Russian fund Da Vinci Capital gets
€30mn from Germany’s DEG to invest
in Ukraine, Belarus and Kazakhstan 15
Fintech & E-commerce 16
Russian e-commerce major
Wildberries to add self-employed
vendor products to offering 16 Russian Dixy retailer to launch online sales with Ozon 17 Valuation of Sistema’s e-commerce
asset Ozon boosted to $1.8bn 17
Telecom 19
Makedonski Telekom’s net profit
up 6% y/y in 2019 19 Romanian telco Digi grows by double
digit rates in 2019 19 Russia could postpone 5G rollout
from 2022 to 2024 20
NIBs 21
March 2020
www.intellinews.com
@bneintellinews
Russia’s top retail and tech companies
join forces to hunt for innovations in
the rest of the world
BAs Russia’s retail and tech sectors consolidate, the leading companies are turned their gaze outwards to hunt for
bne:Tech
new technology and innovation.
See page 2
Ukraine-born startups raised more
than half a billion dollars in 2019
In 2019, the venture capital and private equity funding volume for Ukrainian and Ukrainian-founded tech startups reached $544mn (up from $323mn in 2018 and $265mn in 2017), says AVentures Capital’s latest industry report ”DealBook of Ukraine”,
reports Adrien Henni of Ukraine Digital News. See page 4
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