WeBsite of the expeRt Community of BeLARus Nashe MNeNie 1 (‘Our OpiNiON’) AgenCy foR soCiAL And poLitiCAL expeRt AppRAisAL Belarusian Y e a r b o o k 2018 A survey and analysis of developments in the Republic of Belarus in 2017 Lohvinaŭ Vilnius 2018 2 Belarusian YearBook 2018 Compiled and edited by: Anatoly Pankovsky and Valeria Kostyugova english version translated by Volha Hapeyeva, Andrey Kuznetsov, Vladimir Kuznetsov english version edited by Max Nuijens scientific reviewers and consultants: Oleg Manaev, Doctor of sociology; Andrei Vardomatski, Doctor of sociology (laboratory of axiometrical research noVak); Piotr Rudkovsky (Doctor of Philosophy, Belarusian institute for strategic studies, Biss); Irina Dounaeva, PhD (independent expert); Olga Shparaga, PhD., associate Professor (european College of liberal arts in Belarus, eClaB); Andrei Kazakievich, Doctor of Political sciences (institute of Political studies ‘Political sphere’); Pavel Daneiko (Belarusian economic research and outreach Center, BEROC). edited for printing by: Lidia Nalivko The yearbook is published with support of The German Marshall Fund of the United States The ideas expressed are solely the opinions of the authors and do not necessarily represent the opinions of the editorial board. © Website of the expert community of Belarus Nashe Mnenie (nmnby.eu), 2018 issn 1822-4091 © agency for social and Political expert appraisal, 2017 © logvino literatūros namai, 2018 3 CONTENTS eDiTORIAL FOREWORD 7 State Authorities Nikolai Burov Presidential administration: Between hard line and liberalization 11 Polina Makarova Government: liberalization light 19 Andrei Porotnikov national defense: Technological achievements and political failures 26 Andrei Kazakevich Parliament: Dependence of diversity 33 Dmitry Kukhlei local authorities: lightning catcher for popular frustration 41 ForeigN policy Anatoly Pankovsky Belarusian-russian relations: Mild split-off 51 4 Belarusian YearBook 2018 Denis Melyantsov Belarus-eu: normalization in small steps 57 Andrei Fyodorov Belarusian-american relations: long-standing thaw 64 Anna Maria Dyner Poland and Belarus: Time of ‘weak stabilization’ 71 Gennady Maksak Belarus-ukraine: From privileged to ‘hybrid’ partnership 78 Sergei Bogdan Belarus and developing countries: Critical optimization of relations 85 SOCIETy Yuri Chausov Civil society: spring shocks unable to reverse past trends 95 Valeria Kostyugova Parties: exploration of new reality 103 Elena Artiomenko Media: information security challenges require media policy differentiation 111 Vladimir Dounaev education Policy: Curtailing modernization 119 5 Andrei Laurukhin The Year of science: Modest celebration or lavish funeral? 126 Natalia Vasilevich The religious sphere in Belarus: stability and controllability 133 Andrei Vitushka Health Care: Good intentions but old methods 141 Maxim Zhbankov silent Parade: Belarusian culture – an epoch set to zero 150 Borys Tasman sports: Transition period 158 Andrei Vardomatski Value shift and going through the full cycle 166 Natalia Ryabova research and analysis centers: narrowing the field 173 Economy Dmitry Kruk Macroeconomic situation: recovery growth under the burden of unresolved structural problems 183 6 Belarusian YearBook 2018 Alexander Mukha Foreign exchange Market and Public Finances: Turbulence ahead? 193 Vladimir Akulich labor Market: in the grip of excessive administrative regulation 200 Alеksandеr Avtushko-Sikorski energy sector: Temporary stabilization without clear prospects 210 Maria Akulova Foreign investment: startups and innovations or loans 217 Vadim Sekhovich real sector: Post-crisis growth 225 Authors 232 7 EDITORIAL FOREWORD Belarusian Yearbook 2018 is a comprehensive analysis of the key developments in the main sectors of the state and society in 2017. The main processes underlying the political agenda in 2017 were the gradual withdrawal from recession amidst favo- rable terms of foreign trade, settlement of some discrepancies in the relationship with russia, and conspicuous attempts of the Belarusian authorities to adapt to the changing environment. However, as most of the Yearbook’s experts note, this adaptation is belated and insufficiently consistent. The state’s domestic policy can be described as a cautious search for methods to reform the economy and mechanisms to control people’s sentiments that would produce the least impact on the political system now that the previous social contract has been de facto dissolved. The year was also marked by unsucces- sful attempts to put in place a smaller sized and more effective state machine. The authorities ‘paused’ their efforts to address the hoary structural socio-economic problems and started cre- ating ‘growth points’ in the form of elements of dialogue with society, changeover of the media, campaignsto pursue narrow liberalization of the business environment and create a “new” (digital) economy within the unreformed old framework. Politi- cal reforms were postponed indefinitely. in foreign policy, official Minsk continued to rely on the gradual normalization with the West, seeking to maximize its benefits from the transformation of the eu’s approaches to eastern europe, as well as its role as a facilitator in resolving the conflict in ukraine. The normalizationof the Belarus-u.s. relationship continued in 2017, but at a slower pace. at the beginning of the year, Minsk took an unprecedented diplo- matic step – it unilaterally abolished entry visas for citizens of 80 countries of the world. The relationship between Belarus and russia also went through a kind of normalization: the two countries managed to move towards the settlement of a number of serious conflicts and disputes dating from 2016. However, the level of the engagement between Moscow and Minsk decreased as against the pre-conflict era. in terms of Belarus’s relations with developing countries, the year 2017 was characterized by a 8 Belarusian YearBook 2018 revision of the efficiency of investments – in a broad sense – in this area. The economy saw the commencement of recovery growth against the backdrop of an improved external environment. at the end of the year, Belarus showedall-time best results in terms of inflation and current account of the balance of payments. Demand for labor also recovered; however, the number of people employed in the economy continued to decline, whereas the problem of unemployment remains relevant, especially in the regions. Tensions in the labor market were manifested in mass protests against Decree no. 3. Public opinion polls recorded a surge of discontent at the government’s economic policies in February 2017 – the na- tion spat out its hard economic self-sentiment and its insulted sense of justice. However, no radical changes took place, and by the end of the year, all of the main indicators went back to their typical limits. *** since 2003, the Belarusian Yearbook project hasevolved as a joint effort of the Belarusian expertcommunity to compile, conceptu- alize, and deliver a chronicle of Belarus’s contemporary history. Contributing to Belarusian Yearbook 2018 were indepen- dent analysts and experts, as well asspecialists representing various think tanks, including institute of Political studies “Political sphere”, Belarusian institute for strategic studies (Biss), Belarusian institute for Public administration reform and Transformation (BiParT), school of Young Managers in Public administration (sYMPa), Minsk Dialogue expert initiative, ostrogorski Centre, Belarusianeconomic research and outreach Center (BEROC), Belarus Security Blog analytical project, Centre ecumena, Foreign Policy Council “ukrainian Prism” (kyiv), institute of international relations (Warsaw, Poland), agency for social and Political expert appraisal, and the website of the expert community of Belarus nashe Mnenie (“our opinion”). 9 State authoritieS 10 Belarusian YearBook 2018 11 Presidential Administration: BETWEEN HARD LINE AND liberalization Nikolai Burov Summary In 2017, the Presidential Administration was substantially restructured. Its largely reshuffled leadership was tasked to invent a new outreach tool since the social contract has actually been repudiated. Also, the Administration is to optimize the state machinery again, keeping in mind mistakes made in 2013. None of these tasks have been performed in a way that may be described as satisfactory. The Administration continued patchy reforms of the Belarusian economy, vehemently rejecting any kind of political reform in the country. trends: • The Presidential Administration was cautiously looking for a new ideology and tools to control public sentiment, given that the social contract is no longer valid; • The economy was undergoing piecemeal reform under the supervision of the Administration and president’s proxies, while political reform was out of the question; • An unsuccessful attempt was made to carry out a wiser optimization of the state machinery with due consideration of mistakes made in 2013. Staffing solutions The Presidential administration entered the year 2017 with a changed composition and new tasks. a woman took the office of the presidential chief of staff for the first time in the history of sovereign Belarus: former Vice Premier natalia kachanova was appointed on December 21, 2016. some media called her the most powerful woman in Belarus.1 Career diplomat Maxim ryzhenkov, one of the key sports functionaries since 2012, was appointed first deputy chief of staff. kachanova was set a 1 «Как Кочанова стала самой влиятельной белорусской