Lukashenka and Medvedev failed to reach agreements

Dmitry Medvedev and Alyaksandr Lukashenka had a three-hour private meeting on Saturday. After the meeting they appeared before journalists but didn’t speak about the results of the talks. Thus, media and experts may rely only on their suggestions commenting on the events before and after the meeting.

Remarks during a protocol part at the beginning of the meeting cleared out only two questions, Russian ”Nexavisimaya Gazeta”thinks. The first thing that was found out was that the meeting was initiated by the Belarusian side, not by the Russian one, as it was supposed earlier. “Thank you for your responding my request to meet. Thank you for spending your weekend for the meeting, in spite of your hard schedule,” Alyaksandr Lukashenka said to Dmitry Medvedev. Secondly, it was cleared out that a session of the Supreme State Council scheduled for November 3 wouldn‘t be held on that day. “I think, a range of important issues including preparation for the following session of the State Security Council which will take place at the end of the year,” Medvedev noted.

Basing on these two facts, experts state that Lukashenka has certainly faced some problems, which Russia might help to solve. Besides, as the SSC session is postponed, the two leaders may have failed to progress in principal questions of “union building”. It should be reminded that the principal question include issues on common currency and the constitutional act, which is to outline the architecture of the future union. According to previous information, the “union building” is slowed by a problem of equal rights of the subjects: Minsk is ready for integrating on equal terms, while Moscow reminds about different national economies.

Basing on the remarks of Russian officials concerning progress in imposing single currency, experts have recently suppose that Belarus has become more pliable in conditions of the global financial crisis and is ready to sacrifice some independence for the sake of the national economy.

Lukashenka reminded during the meeting with Medvedev that Belarus depends on Russian economy and said he would like to know about the actions, his ally is going to take in crisis. “We will also discuss a range of in economy and finance of Belarus and Russia. Your point of view is important to us because we are closely attached to Russia from the point of view of economy and financial system. You know that nearly a half of all Belarus' foreign currency and gold reserves are kept in Russian roubles,” Lukashenka acknowledged.

Though the Belarusian authorities do not confess the crisis has evoked negative trends in the national economy, local experts spoke last week that the crisis was coming to Belarus. Minsk asked the International Monetary Fund for a loan of 2 billion dollars, said about the plans to ask loans from international banks and expressed readiness to conduct amnesty of capital. Rumours saying leading exporters have faced problems and have to stock goods are spreading in Belarus. In this situation, Russia’s intention to give a loan of not 2 billion, as Minsk expected, but only one, may be a point of negotiations.

It is obvious that Lukashenka was most worried with a question of Russian gas prices. In the current situation, price growth to 200 and more dollars per 1,000 cubic meters against 129 dollars Belarus pays today is not so critical as catastrophic, experts emphasise.

According to ”Vremya Novosteii , spokeswoman for Russian President Natalya Timakova said after the meeting that an issue on energy prices was really discussed during the talks. But it is still unknown if the sides found concrete solutions.

It should be reminded that a third part of Belarusian exports is oil products. Falling world oil prices lead to cheapening of oil products and low profitability of oil refineries. Decrease in oil prices caused export tax reduction, which is a source of the country’s budget. Decrease in prices of another main point in the Belarusian exports may be expected soon, namely potash fertilisers. Experts also forecast cutting of food prices, food export was bringing income to the state last year.

The fact that decrease of budget and enterprise incomes may cause drop in the living standards including fall in earnings, pensions and scholarship non-payment, is not spoken about in Belarus so far. At the same time many independent experts suppose that the crisis may affect Belarus next year.