The Energy Security as a New Priority: taking the ‘Directive No.3’ seriously?

On June 14, 2007, President of Belarus has issued the Directive No. 3 calling for the economy-wide thrift as one of the top priorities of the state. What are the likely consequences of this action? The BISS experts point to a language of security used to frame the pressing need for cost-cutting across sectors of the economy. This might not come as a surprise, the BISS experts suggest, given the domestic context and the process of decision-making in contemporary Belarus. So the new regulation is rather an ideological, context-specific reaction, than a way to create new incentives for the economy.

The Content of the Directive: Securitizing the Energy Issue
On June 14, 2007, President Lukashenka has issued the ‘Directive No. 3’ that calls for the implementation of comprehensive measures on ‘economy and thrift’. The document contains particular reference to the ‘security of the state’ to be upheld by such ‘major’ factors as ‘economy and thrift’. Indeed, one of the notable features of the document is that it heavily uses ‘security’ words that connote specific, ‘threatening’ state of affairs. The Directive is adopted ‘in order to strengthen the economic security’ by providing ‘energy security of the state’ .
This is hardly a colorful use of language, or a ‘linguistic’ manufacturing of threats. Although presidential Directives (a form of executive order that is unspecified in a Constitution or any law) are usually issued to launch a political or public relations campaign, this time the document probably goes beyond that.
Scholars of International Relations deal a lot with the ‘security’ language used by politicians. They  employ the language of security when dealing with such issues as migration or environmental degradation in order to emphasize the importance of the issue and thus to persuade a target audience. In similar fashion, the Directive makes energy use a security issue, thus modifying the policy priorities. The urgency for such modification is emphasized by the use of the Directive as the particular piece of persuasion.
However, the Directive is not only filled with the security metaphors. It admits that the energy intensity of Belarus is 1.5–2 times higher than in the developed countries with similar climatic conditions and the structure of the economy. The data show that the gap appears to be even higher: it is twice in comparison with Lithuania, 2.1 times in comparison with Poland, and 2.7 times in comparison with Germany (see Fig. 1). This situation is interpreted as ‘abnormal’, so the economy-wide cost-cutting is suggested for a period between 2007 and 2010.
A list of tangible targets contains is as follows. First, energy supply has to be diversified by 20%, but Russia would continue to occupy the majority share in Belarus’ imports of energy (65% by 2020). Second, energy intensity has to be cut by no less than 31% by 2010, by no less then 50% by 2015, and by no less than 60% by 2020 as against the level of 2005. Third, local fuels have to be used more intensely (specifically, 25% of electricity and heating have to be produced by using local fuels, including brown coal and peat). Finally, the Directive is filled with various provisions and instructions for the state bodies to implement some energy-saving and related measures (this part is written in a ‘standardized’ bureaucratic language).
Figure 1: Energy Intensity of Belarus and selected economies, 2005
Kg. of oil equivalent per USD 1000 of GDP (PPP)
Source: International Energy Agency, Energy Statistics
Where is Belarus heading?
The Directive contains concrete energy saving targets to be fulfilled in time. These figures are not new, as they can be found in  the National Program on Energy Saving for 2006–2010 adopted by the Belarusian government. The Decree commands to cut energy intensity by 7.75% per year between 2007 and 2010, providing the ‘mid-term’ rate at 5.55% (2007–2015), and the longer-term one at 4.3% (2007–2020). If fulfilled, Belarus would advance in terms of energy intensity to the level of Lithuania by 2015 and to the level of Germany by 2020. Prior to that, energy intensity has dropped by 25.6% over 2001–2005 (or by 5.1% annually on average). It appears that the plans suggested by the document are not so unrealistic. But why has the language of security been employed to foster ‘economy and thrift’? Indeed, between 2001 and 2005, no urgency measures had been invoked. Does it exclusively come from new challenges produced by new terms of energy trade with Russia?
Managing by the Decree: an administrative response to new challenges
On the one hand, the Directive might be seen as reflecting the mechanics of decision-making in contemporary Belarusian polity characterized by a top-down interaction of ‘persuader’ and ‘persuaded’. On the other hand – and this point is important – the use of security language is a way to signal new stimuli for enterprises in order to make them become more economically efficient. For a long time, cheap energy allowed to postpone a large-scale modernization (that typically leads to employment cuts and other social pains avoided in Belarus on a large scale). The data show that the economic growth in Belarus was not grounded in any substantial increase in the level of investment, if compared to some growing economies. It is only in 2006 investment to GDP ratio amounted to 37.6%, while this level has been rather customary for Asian economies like South Korea (35.2%), Thailand (32.6%), or, more recently, China (39.7%) between 1990 and 1999. By contrast, the level of investment to GDP in Belarus over 1996–2004 was slightly above one-fourth of GDP, or 25% less than in the above-mentioned Asian economies.
Another fundamental feature of the Belarusian economy has been a continuous provision of ‘policy credits’. The latter were given by banks following the instruction of the government, often issued in an implicit, ‘cloaking’ manner. The World Bank study of the Belarusian economy provides a figure that as of December 1, 2004, about 12% of total commercial bank lending was directed credit to agriculture from commercial banks. The state had also been using credit subsidies (interest rate subsidies and debt cancellations) to help particular enterprises and sectors of the economy.
In general, a rather rough estimate tells that between 40% and 45% of credits are ‘direct’ ones provided after some instruction received from either administrative body. This rate is more or less stable over time, and even increased in 2006 in comparison with 2004–2005. Although this estimate is a very approximate, it could be used to illustrate one of the essential features of the Belarusian economy, namely bailouts of the enterprises. But the new terms of trade with energy make companies to struggle with increased costs and maintain competitiveness. Given the record of state assistance to enterprises and sectors, economic actors might customarily continue their reliance on the state support, believing in that ‘cushion’ would be provided again. However, this time difficulties arise.
Accordingly, the Directive is issued to provide economic actors with new stimuli to save on costs. This is a message that the state might be unable to provide subsidies and ‘policy’ credits at a previous scale so the companies must take thrift seriously. In this regard, the language of security is deliberately employed to stress the new priority. In other words, the use of the security vocabulary creates a new condition wherein ‘normal’, or ‘customary’ economic policy is bracketed. At the same time, message is diluted with some material incentives like enterprise directors and managers would now have their wages linked to the intensity of energy saving efforts.
To summarize, the adoption of the Directive is an attempt to upgrade the energy efficiency of the Belarusian economy by the administrative means. The document might be rather unsurprising given the character of decision-making in Belarus, but the language of security it employs makes the Directive somewhat ‘untypical’ regulation. Most likely, it is used to discipline enterprises accustomed to ‘policy credits’ by signaling that ‘bailing-out’ opportunities could be limited in the future because of the seriousness of economic challenges that Belarus is confronted with.
World Bank (2005) Belarus: Window of Opportunity to Enhance Competitiveness and Sustain Economic Growth. A Country Economic Memorandum for the Republic of Belarus (in Two Volumes), Volume I: Main Report, November 8, 2005, Washington, D.C.: World Bank.