Presidential Administration: Expecting a miracle

Nikolay Burov

Summary

Throughout 2016, the Presidential Administration was the scene of a fierce battle between a part of the establishment that did not believe in the restoration of full-scale financial support from Russia being ready for certain economic transformations, and those who believed that the country should wait out the recession until external financing (no matter from what source) is resumed. As the resource base was getting exhausted, and the crisis of the Belarusian model was getting worse, the country’s top leadership had to make more and more efforts to maintain the current policy.

Despite certain successes of the ‘reformers’, the adoption of a new socio-economic development program in June demonstrated their failure. The deficit of funds was compensated through a revision of the social contract both with the population and political establishment, including defense security and law enforcement officials. The latter circumstance significantly increases risks to the system from the point of view of the state administration efficiency and control over the political processes. So far, the Administration has sought to fix problems by taking half-measures.

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Many expected that in 2016, the Presidential Administration would offer a more or less distinct plan to overcome the growing social and economic crisis. As before, the power vertical chose to tighten the screws and harden the social contract. The rejection of reforms, strict policing and de-professionalization of management under the conditions of the diminishing resource base are still typical of the Administration.

During the period under review, the Administration remained an epicenter of the struggle between the conventional free market advocates and conditional conservatives. The first believe that the Kremlin’s decision to reconsider the format of the allied relations, especially when it comes to oil and gas, is final. In other words, although Belarus is a party to integration projects with Russia, it largely falls out of the preferential regime and must find a new model of economic existence that would be less dependent on Russian subsidies.

The conservatives, on the other hand, believe that close integration ties with Russia in terms of the energy policy gives grounds to expect that Moscow will treat its western partner as a part of the Russian Federation with all accompanying perks (which irritates the Kremlin sometimes). As before, the Administration was mainly influenced by the conservatives, because the reformers failed to offer a more or less distinct model of economic transformation free of political risks. As a result, the Administration openly advocated further mechanical cutbacks in the social contract proportionate to the Russian subsidy cuts.

In fact, the Administration tests incoming proposals from the public administration system for compliance with the general policy that can be described as a transformation of the Belarusian socio-economic model only by a long stretch of the imagination. On January 26, the president held a meeting on the economic development, during which he once again stated the inadmissibility of a policy change, and called for using the population’s resources to tackle current economic problems.1 Directive No. 3 ‘Saving and Thriftiness as the Main Factors of National Economic Security’2 issued on June 14, 2007 and updated on January 26, 2016 should be viewed in the same context. The text abounds with abstract slogans, and the feasibility of the set tasks is extremely doubtful.

The absence of a crisis and, therefore, the absence of necessity to make significant changes to the system were once again stated at a meeting on measures to improve the efficiency of the socio-economic sector on February 16.

The National Socio-Economic Development Program for 2016–2020 adopted at the 5th All-Belarusian People’s Assembly was a kind of objectification of the ‘no crisis – no reform’ position. Independent experts said the Program was not quite realistic. The very fact that the Assembly was convened long after the presidential election3 means that, firstly, there is a fierce struggle within the political establishment and the Administration took the wait-and-see position. It can be assumed that this position was dictated by the dynamics of the world prices for crude oil (towards increasing demand and reducing supply at that time)4 and pauses in the negotiations between Russia and OPEC.

Secondly, the Assembly’s behavior was apparently caused by the incompleteness of the socio-economic development program for the next five-year period. It was not duly prepared for only one reason: along with the publicized ‘protective’ version there was another one, pro-reform in nature. The reformers lost the fight, and their unspoken symbol in the establishment – Kirill Rudy – was sent to China as ambassador.

Elements of optimization

The topic of optimization of the state machinery was brought up regularly throughout 2016. It was discussed at a meeting on social and budgetary financial issues on March 15, in the annual address to the parliament on April 21, the All-Belarusian People’s Assembly in June, and during many other events.

Historically, this ‘optimization’ has nothing to do with changes to functions or lesser intervention of the state in political, economic or social processes. This is usually about quantitative changes like those made in 2013, when the Administration tried to revise the role of the regional executive committees considering them a duplicating link, and planned bigger layoffs in the regional executive committees than in the district executive committees.

In the spring of 2016, the Administration looked at the Minsk regional executive committee as a possible target, which means that the powers of the regional heads could be narrowed down to a certain extent. The very choice of the Minsk regional executive committee resulted from a bitter backstage struggle, particularly a conflict between Chairman of the Minsk Regional Executive Committee Semyon Shapiro and presidential Chief of Staff Alexander Kosinets over the construction of the Belarusian Chinese Industrial Park. In February 2016, Kosinets publicly criticized the Minsk regional executive committee for failures. Park Director Andrei Gal was kicked out of office in early May. Shapiro later managed to reassert himself. In general, the idea of downsizing the regional executive committees was not actualized last year.

Decree No. 78 ‘On Measures to Improve the Efficiency of the Socio-Economic Sector of the Republic of Belarus’ was issued on February 23.5 Along with a number of unfeasible tasks, such as the creation of 50,000 new jobs, the decree instructed to reduce staffs of governmental agencies of all levels. The released funds were supposed to be used to raise salaries of the remaining officials. This document, however, cannot be compared with famous decree No. 168 ‘On Measures to Optimize the System of Public Administration and Other State Organizations and Their Personnel’ of April 12, 2013, which introduced a new detailed staff structure for bodies of state administration. Decree No. 78 only declared the assignment without specifying the scope of layoffs.

There were quite a number of explanations why it was that non-specific. Firstly, the 2013 optimization had negative consequences: the effectiveness of the state machinery did not increase, to say the least. The saved funds were tiny and all that was saved went up in smoke due to the aggravated recession. Secondly, quarrels between officials got even more furious as it was unclear who should be laid off, how many of them and in what manner, who should get raises, how, to what amounts, etc. Thirdly, given the poor efficiency of the Belarusian state machinery, further staff cuts could simply paralyze government bodies.

Decree No. 78 also instructed to abolish ‘redundant and duplicative functions’ and directly ordered the Administration and some other bodies to submit proposals before June 1, 2016, which was done. However, even this not monumental task, was not carried out, apparently, as it was with the optimization of 2013, due to the hot and strong resistance of the establishment and the heavy interdepartmental struggle. As of early March 2017, there was no public information about that (except for the optimization of the Administration itself).

Proposals on the optimization the state machinery formulated by the Administration were presented at the All-Belarusian People’s Assembly. They were quite radical: a 1.5 to 2-fold staff reduction, much broader involvement of younger executives, and boosting of the civil service prestige. This could lead to massive upheavals in the Belarusian political establishment. Along with the economic component, these proposals also seemed to display the political will to weaken the establishment, as the resource base was running out, increase its dependence on the Administration, its manageability, and also to prevent possible manifestations of disloyalty.

The importance of these political overtones increases in light of the fact that the optimization was targeted not only at the civilians in the power vertical, but also the law enforcers, which Lukashenko declared expressly at a session of the Interior Ministry Collegium on January 28. He said the ministry’s structure must have been optimized to ensure a proper, highly effective composition of the ministry.

Undoubtedly, from the economic point of view, the need to reduce the staff of security agencies (and do it drastically) was long overdue. A great number of officers employed under Lukashenko when the workforce was bloated will retire in the coming years. In addition to pension benefits they will require cushy jobs as they always do. The raised retirement age only exacerbated the problem: longer time in service means extra bonuses and advances in ranks with all the costly perks, as well as the need to increase the staff of security agencies, because the lower and middle ranking personnel must stay in place, and the ‘put off retirees’ have to stay as well. On the other hand, lesser support for the ‘securocrats’ (even if optimization only hit the Ministry of the Interior) may entail considerable political risks.

A gradual cutting of the machinery costs (including the funding of the law enforcers) began in 2016 anyway. In April, decree No. 142 increased requirements to job applicants and tightened the monthly remuneration policy in relation to civil servants, especially with regard to pensions. The same pension shock was administered to security officials: since 2016, in order to receive retirement and long-service pensions, they are to make contributions to the National Social Security Fund for 16 years now, and this term will increase to 20 years. Since the security officials do not pay their contributions to the Fund, the year 2016 saw the first ‘victims’ of this innovation. It looks like the Administration has not yet realized what consequences may follow.

In general, pensions, utility bills, the tax on ‘social parasitism’ and the continued dominance of the public sector in the economy remained leverage the Administration tried to apply to work out a new, more rigid social contract with the population and, in part, with the elites.

Staff appointments

Personnel rotations in the Administration also reflected the commitment to the policy described above. Many experts believe that the appointment of assistant to the president Kirill Rudy as the ambassador to China meant that the reformists lost the fight. It should be noted in this regard, that the relations with China are supervised by the Administration, rather than the Foreign Ministry. Accordingly, Rudy, who has extensive experience of working in China and dealing with Chinese companies, was sent there to attract investments, which the Administration lists among the immediate priorities.

However, the removal of Chief of Staff Alexander Kosinets, his first deputy Konstantin Martynetsky and deputy in charge of ideology Igor Buzovsky6 on December 21 was the most important event. Kosinets’ dismissal was preceded by alarming signals, including an inspection of the Vitebsk Regional Executive Committee, which he headed. When hearing his report on November 10, the president criticized him for unresolved personnel issues, the slow implementation of Chinese projects and the fact that grassroots ideas never reach the head of state.

Nevertheless, Kosinets did quite well when organizing the parliamentary elections in September 2016, although, judging by a number of indirect indicators, the Administration had to pound the idea of the admission of oppositionists to the parliament into Lukashenko’s head. Kosinets’ hardline style of management is an undeniable fact. Undoubtedly, his conservative position found Lukashenko’s support, whereas radical and half-baked ideas, especially when it came to the optimization (1.5 to 2-fold staff reduction), as well as his tense relations with the governors and the power vertical in general set a significant part of the Belarusian establishment against the chief of staff. Natalia Kochanova seemed to be more capable of reaching compromises: she is softer when communicating with officials and unconditionally loyal to Lukashenko personally. At the same time, she has to take unpopular social measures.

Among other personnel decisions, the traditional rotation of regional chief inspectors is worth noting. In September, Assistant to the President, Chief Inspector of the Minsk region Nikolai Korbut became just an assistant to the president. The Gomel region also lost its curator: Alexander Turchin was appointed head of the Council of Ministers machinery. In October, Chief Inspector of the Brest region Dmitry Goborov became a House representative. In December, the position that remained vacant after Goborov’s transfer was taken by Vasily Gerasimov. Korbut was replaced by Anatoly Isachenko.

Conclusion

As a president’s political headquarters, the Administration tries to find and implement balanced solutions to ensure the stable operation of the state machinery, introduce elements of a reformatory program, and interact (albeit indirectly) with external experts and civil society. However, all these attempts remain rather weak, being consistent to only a limited extent. Mechanisms of rigid and sometimes blunt control (e. g. the so-called ‘decree on social parasites’), saving at the expense of ordinary people (as a matter of fact, by deceiving the people approaching pensionable age), and the expectation of a miraculous economic recovery remain the main characteristics of the Administration.