Russia and Belarus approached the next anniversary of their Union in the context of a crisis in bilateral relations. RBC estimated how much it costs Russia to maintain "special relations" with Minsk
Vladimir Putin and Alexander Lukashenko (Photo: Mikhail Klementiev / RIA Novosti / AP)
April 2 marks the 20th anniversary of the Union of Russia and Belarus, but the "fraternal" states meet round date at the lowest point in their relationship for at least the last six or seven years. Belarusian-Russian relations are going through a "full-scale complex crisis, which includes both disagreements on specific issues of economic content, and contradictions on fundamental issues of a strategic and military-political nature,” says the Minsk Center for Strategic and Foreign Policy Studies. Shortly before the anniversary of the Union, in February, President of Belarus Alexander Lukashenko complained that Russia was "kicking the tail and mane" of the agreements between the two countries, including on the issue of the price of Russian gas. One of the reasons for this behavior of Moscow, according to Lukashenka, is certain forces in the Russian establishment, but not President Vladimir Putin, whom Lukashenka called “his brother” on March 28 (they will meet in St. Petersburg on April 3).
Over $100 billion in 11 years
The Kremlin on the same day when Lukashenka, at his big press conference, scolded the Russian authorities for 15 minutes in a row, from which it follows that "the Russian side has provided and continues to provide large-scale economic, political and other assistance to Belarus." As an example, the Kremlin press service cited the allocation of more than $6 billion in loans to Minsk in various areas and annual duty-free supplies of oil in the period from 2011 to 2015 in the amount of 18 million to 23 million tons. 3 billion. All this is nothing more than direct and indirect support for our allied Belarusian state,” the statement said.
What are the real scale economic dependence Belarus from Russia? “If you look at the figures that the IMF presents, you will see impressive numbers of covert and direct support for the Belarusian economy,” Putin tipped off at a press conference in Bishkek in late February. Indeed, the IMF in September 2016 estimated the total support of the Belarusian economy from Russia at $106 billion for the period 2005-2015 alone, or about $9.7 billion per year ( see infographic). Over the years, the volume of “total net support” from Russia ranged from 11 to 27% of Belarusian GDP, follows from IMF data provided by RBC. But it is clear that in last years Russian aid to the Belarusian economy is dwindling, and this may partly explain Lukashenka's recent displeasure.
The relationship model can be simplistically described as follows: “financial and economic support is exchanged for a certain degree of political loyalty from Belarus,” says Raiffeisen Bank International Senior Economist for Central and Eastern Europe Andreas Schwabe. “The Belarusian economy is unstable without Russian support. It's amazing how President Lukashenko managed to ensure unceasing Russian support for such a long time, 20-25 years," Shvabe told RBC. But recently, Belarus has been showing signs of “political disloyalty” (does not support the Ukrainian policy of Russia, counter-sanctions), and Russia begins to limit financial and economic support (reduces oil supplies to Belarus, raises gas prices, reduces purchases of Belarusian industrial goods), the economist argues , stipulating that, despite all the differences, the fundamental relations between Russia and Belarus remain "surprisingly stable."
The IMF considers total support to be the sum of two components - implicit subsidies from discounts on Russian energy and net financial support. It turns out the broadest assessment, since the IMF financial support takes into account not only interstate loans, but also the balance of mutual direct investments, as well as loans to Minsk through the Eurasian Fund for Stabilization and Development (EFSD, the former anti-crisis fund of the EurAsEC), whose resources are 88% formed by Russian contributions (at the end of 2015, Minsk owed the fund $1.94 billion, and in 2016 it borrowed another $800 million).
State aid
Such an approach may not be entirely fair if it is necessary to evaluate state financial assistance, says ACRA analyst Dmitry Kulikov, among the direct foreign investment there are private ones, they can bring real income when dividends or interest are returned to Russia. In his opinion, it would be reasonable to take into account the debt of Belarus on state loans (including loans from Russian state banks to the Belarusian government) and the amount of accumulated subsidies for oil and gas supplies, and not take into account direct investments.
The debt of Belarus on intergovernmental loans from Russia at the end of 2015 amounted to $ 6.02 billion, follows from the balance of payments of the union state, available on the website of the Bank of Russia (there is no review for 2016 yet). The Russian Finance Ministry refused to disclose to RBC the current debt of the Belarusian government, and the Belarusian Finance Ministry did not respond to RBC's request. The last time an intergovernmental loan was publicly reported was in July 2015, when Minsk received a $760 million Russian loan. According to Belarus’ balance of payments with Russia for 2016 (available on the website of the Belarusian National Bank), last year the Belarusian government’s net borrowing in Russia amounted to $250 million, but these could have been loans from Russian state-owned banks. Their help is a big channel of Russian injections into the Belarusian economy.
In 2012, Vnesheconombank agreed to provide Belarus with up to $10 billion for the construction of the Belarusian nuclear power plant under an intergovernmental agreement, but so far only the first tranche of $500 million has been allocated (in May 2014), and only $248 million has been selected from it, VEB head Sergei Gorkov said in December . Sberbank lent the state-owned Belaruskali $900 million in 2011 and $550 million in 2015. In general, as of October 1 Russian banks held assets in Belarus for $4.9 billion (minus their liabilities there - $3.7 billion). VEB, Sberbank and Gazprombank did not respond to requests from RBC, and VTB said that the portfolio of loans from its Belarusian subsidiary to local enterprises with state participation is about $ 75 million in terms of Belarusian rubles.
The largest investor
Russia's direct investment (FDI) in the Belarusian economy takes from 57 before 64% total foreign investment in the country, according to the National Bank of Belarus for 2010-2015. At the same time, Russian FDI in Belarus is declining, according to the statistics of the Russian Central Bank (see infographic): net accumulated investment peaked in 2010 ( $5.6 billion), and as of October 1, 2016 they were $3.4 billion.
Official Russian statistics underestimate the volume of investments in Belarus, claims the Center for Integration Studies of the Eurasian Development Bank (EDB), which conducts its own monitoring of mutual direct investments in the CIS. If, according to the Central Bank, the amount of accumulated investments from Russia to Belarus in 2015 amounted to $3.6 billion, then EDB monitoring shows the figure $8.3 billion. The Bank, among other things, analyzes corporate reporting and media reports; in addition, unlike the Russian regulator, it takes into account investments through offshores and other “transshipment bases” of capital. The indicator of the Central Bank includes exchange rates, market revaluations and other changes.
Belarus is the leader in Russian incoming investments among the countries of the Eurasian Economic Union. However, this happened mainly due to the purchase by Gazprom of Beltransgaz (now Gazprom Transgaz Belarus), for which the concern spent $5 billion in the period from 2007 to 2011. Other significant Russian projects are investments in the subsidiaries of VEB and MTS, in the main pipeline of Transneft and the Mozyr Oil Refinery.
How much is Russia losing?
According to the IMF, up to 90% of Russia's economic support for Belarus comes from hidden subsidies for the supply of gas, oil and oil products. Sergei Agibalov, head of the Economics and Finance sector at the Institute of Energy and Finance, estimates that the total volume of Russian subsidies to Belarus with preferential energy supplies since the early 2000s amounted to almost $100 billion, or over 200% of Belarusian GDP in 2016. Subsidies for gas in 2001-2016 amounted to $49.4 billion, for oil - $46.9 billion, follows from Agibalov's calculations for RBC. And unlike loans that are returned with interest, oil and gas benefits for Belarus are irretrievable indirect losses. Russian budget. “This is not money thrown away for us – these are calculated steps based on future results,” Vladimir Putin assured at the end of February.
“All the years of independence, Belarus received gas from Russia for exclusively favorable conditions“In some years, it bought gas many times cheaper than all neighboring European countries,” Agibalov. He calculates the gas benefit as the difference in the price of imports with Germany (this is a comparable large consumer, the price of Russian gas on the border with Germany is published in open sources, and it can be considered a competitive market price, he explains). But in 2016, the gas subsidy dropped sharply to just $350 million from $2.2 billion a year earlier, according to Agibalov's calculations; and the Russian authorities by the end of March 2017 had already counted $ 700 million in debt to Belarus for the supplied gas.
Russia supplies Belarus with crude oil duty-free, and processed oil products are supplied by Belarus abroad with the collection of a duty and its transfer to the Belarusian budget. Subsidies from Russia have recently declined due to the peculiarities of the export duty. The decline in world oil prices leads to a smaller decrease in the price of imports of crude oil that Belarus imports from Russia, compared with a decrease in the prices of petroleum products that Belarus exports - this is a consequence of the tax maneuver in the Russian oil industry explains the Eurasian Development Bank. “At high oil prices, Belarus bought it twice as cheap as the market price, and now it’s 25% cheaper,” states the director of the Research Center international trade RANEPA Alexander Knobel. - Russia depends on oil and gas, and Belarus in the same way depends on the Russian oil and gas market. If it worsens, then the problems worsen.”
Will Belarus be able to get away from Russia?
Amid dwindling Russian economic support, Minsk tries to diversify sources financial assistance and foreign trade based on Russia, but it is difficult to do this, says Sergey Pukhov, a leading expert at the HSE Development Center. Since 2015, Belarus has been negotiating with the IMF on a potential loan of up to $3 billion, and the EU sanctions lifted from the country in 2016, in principle, opened up the possibility for loans from the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank.
“In terms of trade, Belarus, of course, is trying to diversify its exports, arrange supplies to the EU countries, and does not want to lose the Ukrainian market in any case,” adds Alexander Knobel. “Russia for Belarus is half of trade, the second half is Ukraine, the European Union (mainly Poland and the Baltic states), Russia is the main partner, but Minsk wants to reduce this share and increase its presence in European markets.”
But Andreas Schwabe says that under Lukashenka, Belarus is unlikely to turn its back on Russia. “The West, in exchange for significant financial support, is likely to demand from Minsk economic reforms, which would weaken Lukashenka's control over the economy and the state as a whole - and this is unacceptable for him, ”the economist argues. Yes, and Russia after 2014 showed with its policy in the post-Soviet space that it would not “allow” Belarus to take such a step.
With the participation of Oleg Makarov
The 2019 Republican Budget was approved with a surplus, that is, its revenues are expected to exceed expenditures by about 1.7 billion rubles, or $767 million. The budget for 2018 was also approved with a surplus, but its amount was less - about $360 million .
For the calculation, we took the weighted average exchange rate Belarusian ruble against the dollar in January-November 2018 (2.03) and the exchange rate planned for 2019 (2.216).
Both in rubles and in terms of dollars, the republican budget for 2019 is richer than for 2018. But if we compare it, for example, with the budget of 2013, then the filling of the republican treasury in dollar terms is 21% less.
Republican budget revenues in dollar terms
(as of the beginning of each year)
2013 - $13.6 billion
2017 - $9.6 billion
2018 - $10 billion
2019 (project) - $10.7 billion
Approximately one eighth of the republican budget will be sent in the form of subsidies to the country's regional budgets. Compared to 2018, the amount of subsidies to the regions in rubles will slightly increase, but in terms of dollars it will remain the same - about $1.3 billion. At the same time, five years ago, in 2013, 2.7 times more subventions were allocated in dollar terms.
Compared to 2018, revenues from the republican budget to the road fund will increase by about 4 times. In addition to injections from the republican treasury, this fund is also formed at the expense of the so-called transport tax, tolls on toll roads and other payments. In total, the 2019 budget of this fund in terms of dollars will be $253 million, $24 million less than in 2018.
Traditionally, the lion's share of the money from the road fund will go to the republican roads, the rest will be transferred in the form of subventions to the regions for the repair of local roads.
Next year, less money will be allocated to local roads than in 2018: subventions will decrease from $71 million in 2018 to $65 million in 2019. The Brest region will receive about $11 million in equivalent, in 2018 our region received $0.7 million more.
In 2019, 26% of the money from the road fund will go to subventions to the regions, in 2018 - 24%.
Compared to 2018, the expenses of the republican treasury for servicing the public debt will increase. In 2019, it is planned to allocate $1.3 billion for this, in 2018 it was $1.2 billion. Plus, repayment costs will increase external debt. There will also be an increase in spending on national economy.
The remaining major items of expenditure of the republican budget in terms of dollars will remain approximately at the level of 2018.
For many years now, the Social Protection Fund, which finances the payment of pensions and benefits, has been unable to fulfill its obligations on its own and “survives” thanks to infusions from the republican budget. This is due to the fact that the contributions made to the Social Security Fund by working Belarusians are not enough. In 2019, injections from the republic into this fund will decrease: both in rubles and in dollars. At the same time, the fund's own income will grow. It is expected that labor pensions in Belarus will increase by 14% next year.
The draft budget for 2019 includes the following indicators: the exchange rate of the Belarusian ruble against the dollar is 2.216, the GDP growth rate is 102.1%, the average annual inflation is 5.3%, the price of oil is $60 per barrel.
According to experts, these figures are "quite plausible."
- Most likely, the exchange rate of the Belarusian ruble against the dollar by the end of next year will not exceed 2.25, I allow the inflation rate to be within 5.5%. Although the price of oil has now updated the minimum since September 2017 and a barrel costs about $ 55, an increase in its cost next year is not excluded, - argues Vadim Iosub, senior analyst at Alpari. - The only thing that is in doubt is the budgeted GDP growth. Now economic growth is slowing down. This will continue early next year due to the lack of compensation due to Russia's oil tax maneuver. I assume GDP growth next year at 1%-2%.
The bill on the republican budget for 2019 in the second reading was adopted by the deputies on December 19. Zero reading of the document passed on December 18th. At the same time, the deputies saw the draft budget on the day of the meeting.
“This morning, forty minutes before the start of the Chamber’s meeting, the documents appeared, though yesterday’s date,” wrote the deputy from the opposition Anna Kanopatskaya on the
The state budget of the Republic of Belarus is the main financial document country, developed by the Ministry of Finance in conjunction with interested departments. It is based on the budget and tax legislation countries, main directions monetary policy, predictive parameters of socio-economic development, as well as other normative documents and initial data.
The budget system of Belarus consists of the republican and local budgets, the first of which has the status of law, and the rest are approved by the relevant decisions of the local Councils of Deputies.
The state budget consists of revenue and expenditure. The first of them reflects all irrevocable receipts, the main items of income formation are:
The most significant source of income is taxes, which form approximately 80% of the state budget revenue.
As for the expenditure part of the budget, the important items are the costs of:
The government spends money to pay employees public sector and law enforcement agencies, to support agricultural and industrial enterprises, for the construction and reconstruction of state property, holding election campaigns, etc.
The sums of the revenue and expenditure parts of the budget should ideally be equal - in this case it is called balanced. If the state's revenues are higher than its expenditures, the budget is called a surplus; otherwise, it is called a deficit. The excess of expenditures over incomes is not a critical factor if it is foreseen in advance, since the economic authorities of the country determine in advance how it will be possible to compensate for the budget deficit. Common options are:
Decisions on compensation mechanisms budget deficit during fiscal year accepted by the relevant authorities and agreed with the leadership of the country.
For the current year, the country's leadership approved the state budget with a surplus of 1.7 billion rubles. At the same time, its revenue side should amount to 23.68 billion rubles, expenditures - 21.98 billion rubles.
| Industry/direction | billion rubles |
|---|---|
| Main income items | |
| tax revenues | 18.3 billion rubles |
| non-tax revenues | 2.79 billion rubles |
| donations | 2.5 billion rubles |
| from state trust funds | 0.8 billion rubles |
| Main items of expenditure | |
| state activity | 10.25 billion rubles |
| public debt service | 3 billion rubles |
| healthcare | 1.02 billion rubles |
| social sphere | almost 2 billion rubles. |
| physical education and sports, media and culture | 0.63 billion rubles |
| defense, maintenance of law enforcement agencies and the Ministry of Emergency Situations | 1.24 billion rubles |
| education | 1.047 billion rubles |
Support for the national economy is among the most significant items of expenditure: it is planned to allocate 3.2 billion rubles for these purposes, and about 0.5 billion will be directed to the agricultural sector.
The official media published the draft republican budget for 2018: state treasury revenues will amount to Br 20.485 billion, expenses - Br19.751 billion, a surplus, which is also a financial surplus, will amount to Br733.88 million, which will be used to pay off part of the state debt.
Functional expenditure structure: general government activities - Br10,020.9 million, national economy - Br2 473.8 million, judiciary, law enforcement and security national security- Br2 120.8 million (!), social policy - Br1 774.2 million, national defense - Br1 104.7 million, healthcare - Br895 million, education - Br877.4 million, republican road fund - Br594 million, family capital- Br348.5 mln. state support- not less than 900 thousand sq.m. A significant part of the draft budget (65%) is planned for the cost of wages, pensions, scholarships, allowances and other payments.
Expenses on reserve funds for the first time increased by 2.6 times - up to 1.22 billion rubles. This was mainly due to an increase in spending on the President's reserve fund. Thus, the presidential reserve fund receives more funding than the Ministry of Defense, in numbers: 1,201 million rubles against 1,104 million rubles. How and how transparently funds will be spent reserve fund, official sources do not report.
At the same time, spending on the national economy decreased by 10% (to 2.47 billion rubles), on healthcare - by 7.8% (to 895 million rubles), on education - by 2.8% (to 877 million rubles), for social policy - by 2.6% (up to 1.77 billion rubles).
As the main parameters for calculating the draft budget, a conservative scenario has been adopted, in which Belarus' GDP will grow by 1.2%, inflation will not exceed 7.4%, the average annual oil price will be $43 per barrel, and the dollar exchange rate will be 2.038 Belarusian rubles.
For comparison, the republican budget for 2017 was planned with the number of revenues - 18.2 billion rubles, expenditures in the amount of just over 16.7 billion.
