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Belarus Weekly: International rating agencies signal Belarus hit default

by Maria Yeryoma July 22, 2022 5:03 PM 5 min read
A sign for the financial agency Fitch Ratings Ltd. is seen on a building at the Canary Wharf, in London, U.K. Fitch and Moody’s signal Belarus hit “default,” citing the country’s failure to repay Eurobond payments. (Getty Images)
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International rating agencies Fitch and Moody’s signal Belarus hit “default,” citing the country’s failure to repay Eurobond payments.

Russia steps up the transit of military personnel and equipment through Belarus, as journalists track the increasing presence of Russian trains and cargo aircraft in the country.

Belarus arrests a military analyst accused of “unlawful disobedience,” publishing a video of him confessing to “extremist views” on Russia’s war against Ukraine.

Ukraine seizes Belarusian locomotives that were used to transport Russian military personnel and equipment to Ukraine.

Belarus terminates independent labor unions, citing “destructive activities” in violation of public order.

Belarus defaults on Eurobonds

Credit rating agency Fitch downgraded Belarus’ Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to “RD” (restricted default) on July 18, citing the failure to repay a 2027 Eurobond coupon payment within the 14-day grace period.

The move follows Moody’s statement on July 14 that Belarus’ actions constitute default, as Belarus failed to fulfill its obligations of $22.9 million. According to Reuters, the international rating agency S&P maintained Belarus’ foreign currency rating at “CC/C.”

In late June, Belarus’ National Bank announced that the country would cover dollar payments in Belarusian rubles. “This contravenes bond documentation that does not allow for settlement in alternative currencies,” the Fitch statement reads.

According to Belarus’ Finance Ministry, Fitch ignored “detailed explanations and a reasoned request from the Ministry of Finance for a full and comprehensive analysis of the situation regarding payments on Eurobonds.”

According to Lev Lvovsky, an economist with the Belarusian think tank BEROC, the default will have a minimal effect on the country’s economy in the short term, as Belarus has already been restricted access to most international financial markets. On the other hand, Lvovsky says Belarus may use the current situation to evade the next round of Eurobond payments in 2023, amounting to $800 million.

Russia transports military cargo through Belarus via air, rail

At least 15 Russian military cargo aircraft were spotted in Belarusian airspace last week, reports Belaruski Hayun.

From July 9 to 17, the monitoring group noted an increase in the number of Russian aircraft landing at the Machulishchy air base in Belarus, including Ilyushin IL-76s, Antonov An-22s, and Antonov AN-124s. It is unknown what equipment the military cargo aircraft were transporting.

Read More: Putin lacks troops in Ukraine but fears mobilization in Russia

Belaruski Hayun also reported a rise in rail traffic through Belarus last week, as the transfer of military equipment to and from Russia increases.

The monitoring group observed two trains likely containing ammunition entering Belarus on July 14 and 17. Several trains were also carrying Russian tanks, infantry fighting vehicles, armored personnel carriers, and self-propelled howitzers, among other equipment.

However, Belaruski Hayun says there is currently not enough military equipment to launch a new offensive into Ukraine from Belarus.

Ukraine seizes Belarusian locomotives transporting Russian troops, equipment

Three Belarusian locomotives transporting Russian military personnel, weapons, and equipment to Ukraine were seized on July 18, reports Ukraine’s State Security Service. The seized assets of the state-owned Belarusian Railway are worth over Hr 70 million ($2.4 million).

The seized locomotives were reportedly transporting personnel and equipment for combat operations in Kyiv and Chernihiv oblasts.

Since the beginning of its full-scale invasion of Ukraine, Russia has relied heavily on Belarusian railways to supply its offensive into Ukraine, although Belarusian activists have sought to disrupt their operations.

Belarus’ Supreme Court shuts down independent labor unions, citing ‘illegal activities’

Belarus’ Supreme Court forced five major independent Belarusian trade unions to cease operations on July 19, citing “destructive activities” and the violation of public order.

According to Belarus’ Prosecutor General’s Office, the leaders and several members of the affected trade unions are accused of “disrupting public order” and sharing “extremist content.”

Read Also Discontent grows between Kyiv, Belarus opposition as Russia drags Belarus further into war

In April, at least 19 independent labor union representatives were detained, some of whom are reportedly still in custody.

When mass protests began following the 2020 Belarusian presidential election, deemed rigged by the international community, many workers responded by organizing strikes at state-controlled enterprises. In many cases, independent trade unions were created when pro-government unions declined to support workers.

Belarus moves troops closer to Ukrainian borders, detains bystanders

On July 14, the monitoring group Belaruskiy Hayun reported the movement of military equipment in Ivanava, Stolin, and Drahichyn, southern Belarus regions bordering Ukraine. Local authorities claim the movement to be part of a planned combat training exercise.

However, the Belarusian Ministry of Defense hasn’t announced any military drills in that particular region.

Later on July 15, the monitoring group also reported that a train with Belarusian military personnel is to arrive in Yelsk, Gomel region, also bordering Ukraine, reportedly to “strengthen the protection of the border.”

On the same day, Oleksiy Gromov, deputy head of Ukraine’s General Staff, claimed that Ukraine is expecting “provocations” from both Russian and Belarusian militaries at the border.

In Ivanava and Drahichyn, increased military presence coincided with mass detentions of civilians. The local branch of the human rights watchdog “Viasna" reported at least 20 detainees. Most detainees were detained for publishing information concerning troop movements.

Belarusian autocrat Alexander Lukashenko attends a joint Belarus-Russian military exercise near the town of Osipovichi outside Minsk on Feb.17, 2022. A week later, Russia launched a full-scale invasion of Ukraine using Belarusian territory. (Getty Images)

Belarusian military analyst arrested for comments on Russia’s war

Yahor Lebiadok, a Belarusian military analyst, was sentenced to 15 days of administrative detention by Belarusian law enforcement on July 12 for alleged “unlawful disobedience.”

Belarusian law enforcement published a video on Telegram soon after, in which Lebiadok is shown, confessing to granting interviews to “channels recognized as ‘extremist.’”

Lebiadok is a former regional council member and a military analyst who has been sharing his insight and opinions on Belarus’ military and Russia’s full-scale invasion of Ukraine.

He was quoted by the Kyiv Independent for its latest piece on the extent to which Belarus’ military has the capacity to attack Ukraine.

Read the article: Does Belarus' military have the capacity to attack Ukraine?

BYSOL foundation raises over 500,000 euros for Ukraine in first 100 days of war

BYSOL, the fund that emerged in 2020 to help repressed Belarusians, had raised over half a million euros to help Ukraine in the first 100 days of the full-scale Russian invasion, states the fund’s report. One-third of the sum is funded by donors of the organization, and the rest is gathered via crowdfunding campaigns among Belarusians.

The funds were raised for three causes: humanitarian aid to Ukraine, equipment for Belarusian volunteers fighting for Ukraine, and helping Ukrainian women who suffered from sexual violence.

Humanitarian aid to Ukraine included the delivery of ambulances and tactical cars capable of transporting injured and dead, and medicine worth 276,000 euros. Another 53,000 euros were delivered to sexual assault survivors.

Over 143,000 euros were raised for Belarusian volunteers fighting with the Kastus Kalinouskiy and Pahonya regiments, as well as for individual Belarusian fighters within the Ukrainian army.

3 companies that consult conscripts were shut down

A Telegram channel linked to Belarusian law enforcers, on July 19, published videos with the founders of three companies that have been helping Belarusian conscripts find legal and medical grounds for deferring military service.

All three had to "confess" to participating in unlawful mass gatherings and being influenced by “destructive Telegram channels.” At least one of the detainees was forced to sign a non-disclosure agreement.

The websites of all three firms stopped working on July 18.

In Belarus, the official medical examination is performed loosely, leaving many medical conditions unnoticed. The firms have consulted young men on the examination they might want to undergo to reveal the diseases that exempt them from military service.

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