Page 66 - BNE_magazine_07_2020

66 Opinion
bne July 2020
Students of police and military academies have been denied summer holidays. Retired policemen are also being urged to return to the service. The army is calling reservists up for military service one week before the election. There are reports of mass production and purchasing of anti-riot equipment. Lukashenko is preparing to give Belarusians one last decisive fight.
There is almost no doubt that he will win it. But what next? Next, Lukashenko loses legitimacy not only in the eyes of the
people but also a significant portion of the nomenklatura. The Western vector is closed to him. In the East, Mother Russia is not shy to say that further support comes only in exchange for sovereignty. The Russian tax manoeuvre deprives Belarus of one of its two main sources of income. The other one – export of potassium fertilisers – is also going through a hard time because of low procurement prices. Yes, Belarus can still count on loans from Russia, China and Lukashenko’s Middle East cronies, but the terms of these credits are far from friendly and at best they could help the economy hold on for another year or two.
After that, however much Lukashenko tries to avoid it, Belarus will need deep structural reforms. Otherwise, as long as Russia doesn’t change its mind and resume support, the most likely future for Belarus would be to default on its loans and devolve into a failed state.
Lukashenko understands that better than anyone else. A few years ago, he initiated a constitutional reform, which he probably sees as the beginning of a Kazakhstan-like transit to post-Lukashenko Belarus. It is likely that the new constitution will significantly weaken the President and transfer more power to other branches, leaving Lukashenko with the status of an arbitrator in a different capacity.
The system Lukashenko built no longer works. He himself is no longer popular. He can extend his time in office with the help of the bayonets, but at the end of the day, he will have to make a decision: to reform Belarus himself, or to give up power and let others do it.
KYIV BLOG: Rada deputies undermining Ukraine’s investment case yet again with planned reforms to the OVDP local bond market
Ben Aris in Berlin
Servant of the People lawmaker Oleksandr Dubinsky has submitted a document to the Verkhovna Rada’s Finance Committee on the workings of the National Bank of Ukraine (NBU) that will undermine confidence in the booming local debt market and could do further damage to Ukraine's already battered investment image.
Foreign investors have poured into the Ukrainian Ministry of Finance hryvnia-denominated treasury bills (OVDP) ever since the local debt market was hooked up to the Clearstream international settlements and payments system last year, investing some $5bn and now accounting for a third of the outstanding bills.
However, the NBU has been under attack by oligarch Ihor Kolomoisky as he tries to regain control over PrivatBank,
www.bne.eu
which was nationalised in 2016. As part of his campaign he has sought to undermine the NBU’s independence via his proxies in the Rada.
Dubinsky has worried observers by including references to a “pyramid scheme” and “default” involving the country’s OVDPs that will undermine confidence in the bond market.
According to NV business editor Ivan Verstyuk, this wording could mean big problems for the Ukrainian investment market, regardless of whether or not the document is approved, as cited by BMB in a blog emailed out to subscribers.
“The more the authorities throw around the words ‘default,’ ‘bond issues,’ and ‘OVDPs pyramid scheme,’ the less interest