2011: Year Under The Sign Of Crackdown

The year of 2011 was in many respects a unique year for Belarus. Unlike a regular year, it started not on 1 January but rather on 19 December of the previous year. On that day the presidential election took place and in the evening a huge crowd of protesters gathered in the center of Minsk. The police violently dispersed the crowd. Hundreds of the protesters were arrested, including 7 presidential candidates. Numerous hopes for a more democratic future crashed instantly. As a result, all the major events and trends of 2011 in Belarus were in this or another way affected by the crackdown and its repercussions.

Reduced Space For Geopolitical Maneuvering

The most evident repercussions of 19 December reflected in foreign policy. After two years of a thaw in the relations with the European Union the 2011 signified a partial isolation of Belarus by the EU. Targeted sanctions against certain individuals and economic entities were introduced and expanded throughout the year. But it was only a partial isolation - Belarus remained in the Eastern Partnership and some official and informal political communication continued. Moreover, mutual trade (in particular, Belarusian exports) demonstrated an impressive growth. According to the Belarusian Statistics Agency, the export of Belarusian goods to the EU in January-October 2011 grew by 121,7% (compare: the exports to Russia grew by 41,2%).

However, even the partial isolation from the EU lead to a significant reduction of the space for geopolitical maneuvering. The Belarusian authorities became more exposed to pressure from Russia. Dependence on Russian credits, investments and subsidies grew considerably. As a result, Belarus had to fully implement its integration commitments given to the Kremlin, which in many respects endangered the country’s interests. For example, a recently leaked government document shows that the authorities did not even have enough time to analyze the future implications of Russia’s accession to the WTO for the Belarusian economy before they had to sign the documents on the Single Economic Space. They were simply rushed into it by Moscow.

‘Belarusian Economic Model’ Hopes Lost

The economic crisis that hit the country in 2011 was not directly caused by the crackdown on 19 December. It was an inevitable outcome of multiple macroeconomic imbalances that the government had ignored for several years. However, 19 December made a less painful transformation of the model impossible. It deprived Belarus of potential western investments which could have softened the currency shocks and facilitated some degree of economic modernization. Western investments would have also counterbalanced Russian investments and, thus, safeguarded the interests of the Belarusian elites and society at large.

But after the government resorted to repressive actions against its political opponents several international financial institutions (including the European Bank for Reconstruction and Development and European Investment Bank) decided to suspend their programs in Belarus. This was interpreted by potential western investors as an additional sign that the country was not safe to work in. As a result, instead of USD 6.5 billion of foreign direct investments (FDIs) planned for 2011 Belarus received less than USD 800 million of FDIs in its real economy (the Beltransgaz deal can hardly be considered an FDI).

The Power VerticalMyth Unveiled

Before 19 December 2010 and the economic crisis of 2011 the Belarusian ‘power vertical’ was widely seen as super efficient. The majority of experts argued that the political model was capable of producing any governance result wanted by the president. Therefore, they would say, there should be no problem with, for example, carrying out market and political reforms once a decision is made by Alyaksandr Lukashenka. Now it looks like this theory was wrong.

The financial turbulence of 2011 clearly showed that the ‘power vertical’ in Belarus ceases to be efficient as soon as it faces untypical challenges. Under unaccustomed circumstances it fails to perform even relatively easy tasks. Like, for instance, privatization. In order to help the troubled state finances the government worked out a privatization plan for 2011. But the ‘power vertical’ only managed to sell 13% of the planned assets.

While the reasons for this failure are multiple, one is particularly interesting. According to the Chairman of the State Property Committee Georgi Kuznetsov, the privatization was sabotaged by local bureaucrats and managers of state enterprises. In other words, like on 19 December 2010, some parts of the ‘power vertical’ undermined the government’s policy and worked against the government’s interests. And, as the emergence of cracks in the government demonstrated, the more difficult challenges get the less potent the Belarusian ‘power vertical’ becomes.

National Pessimism

On the background of the repercussions of 19 December and the crisis of 2011 it is not surprising that numerous surveys revealed a very alarming trend. Thousands of people left the country in search of better work and life standards. Even more sadly, according to several polls, between 60 and 80 per cent of the youth are eager to emigrate once they have a chance. And today it is really difficult to find even a most radical babushka-supporter of Alyaksandr Lukashenka who will not be happy for her grandchildren to leave Belarus for a better place.

Thus, Belarusian society is unanimous in its pessimism about the future of the country and opportunities that one can have in it. This is, perhaps, the most telling result of the outgoing year and the best characteristic of the accomplishments of the incumbent regime.

Unfortunately, it looks like the legacy of 19 December will continue to stay with us and will become lingering. It means that there might be many more unpleasant developments waiting for the people of Belarus. And we can only hope that the New Year will introduce a bit more of optimism in the lives of the Belarusians.

Yauheni Preiherman

Yauheni Preiherman is Policy Director at the Discussion and Analytical Society “Liberal Club” in Minsk

Yauheni Preiherman is Policy Director of the Discussion and Analytical Society Liberal Club in Minsk.

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