Fear and Loathing in Barysau
On 8 November, in a repeat of his 2012 visit, Alexander Lukashenka sent waves through the headlines in all Belarusian media during a visit to a state-owned woodworking manufacturer Barysaudreu in Barysau, a town 60 km from Minsk.
The two events, separated by a year, bore different messages for the Belarusian political class. In November 2012, Lukashenka extended a blank cheque to the state-owned industry. Last week, confronted with the failure of his policy, the Belarusian autocrat resorted to fear-mongering and publicly fired several top officials.
Modernization as institutionalised waste
Last year’s visit from President Lukashenka to Barysaudreu sealed the acceleration of a kind of Belarusian analogue to an industrial “New Deal”. Under the label of “modernization”, large state-owned manufacturers received access to unprecedented amounts of public funds.
Launched in the late 2000s, the policy aimed to improve the competitiveness of Belarusian industry through massive investment in new equipment. As an example, by 2013 the modernization of the woodworking industry alone cost the state budget over 800 million USD.
This year, Alexander Lukashenka arrived in Barysau amid news of numerous flops with the process of “modernization”. The case of the Liahavichy flax factory became a poster child of waste, as the newly bought state-of-the-art equipment did not fit in the factory building. The inspection gave the Belarusian leader an opportunity to give his assessment of this “modernization” and the way in which it is conducted.
What happened at Barysaudreu?
In his typical manner of combining a staged performance with scathing impromptu exchanges, the Belarusian strongman announced a series of sudden dismissals of top-tier officials. Assuming the role of a harsh manager, Lukashenka spared neither invectives nor threats.
He publicly sacked the deputy head of the Presidential Administration Andrei Tur, the governor of the Minsk region Barys Batura and the head of Bellesbumpram, Alexander Pereslautsau. A number of key top officials received harsh reprimands.
The dressing-down of high-level bureaucrats came at a peculiar time. Both official and independent economists have come to a rare agreement about a coming economic shock. In October 2013 the government and the National Bank presented a joint economic action plan. The plan combined some economic liberalization with public spending cuts. Independent analysts, such as Sergey Chaly, have long argued for structural reforms and currency devaluation.
In foreign policy, Lukashenka’s flirtations with the West neither got him IMF loans or EU investment nor any generous economic support from Russia. On October 28, the IMF mission left Minsk with a straightforward message -- no loans would be coming from the IMF to the beleaguered Belarusian economy. European politicians are openly sceptical about cooperation with Belarus within the existing “Eastern Partnership” framework.
Lithuanian MP Audronius Ažubalis claimed that the role of Belarus in the coming Vilnius summit will be “modest, irrespective of who will represent the country”. Further loans from the Eurasian Economic Community are not yet in question, as Belarus awaits the last installment of the current credit line.
Left only with painful economic choices, Lukashenka may seek to achieve some effect on the economy by showcasing repression.
Left onlywith painful economic choices only, Lukashenka may seek to achieve some effect on the economy by showcasing repression. And it is equally plausible that a credible threat from an autocrat with a record of political violence may prod some officials to innovate, whether it be it finding some relief for illiquid Belarusian goods or fabricating another solvents affair.
While those are mere speculations, two things are clear. First, the Belarusian leader is not ready to sanction structural economic reforms. Second, he assigns blame for the failure of “modernization” to the officials who implement it, and not to the policy itself.
A game of balancing
With the presidential elections looming in 2015, the president’s economic woes increasingly translate into political problems. The Belarusian population remains passive -- in October Lukashenka’s electoral rating hit a new high since the 2011 crisis, according to the latest IISEPS data. Coupled with the disorganised state of the opposition, the only foreseeable challenge to his power can come from within the bureaucratic elite. By mounting a wave of repression against the bureaucracy, Lukashenka would clearly raise political stakes rather than hedge his bets.
This can explain that despite the president’s feisty rhetoric, the actual consequences of the Barysaudreu incident have proven to be rather modest. None of the publicly fired officials were prosecuted. Lukashenka’s spectacular exile of the ex-governor Batura to Barysaudreu at the threat of imprisonment turned out to be a bluff. More importantly, Euroradio has reported that the failing woodworking industry will soon receive another installment of “modernization” funds totaling 214 million USD.
Facing the mutually exclusive need to punish those responsible for the “modernization” flop and to secure the political loyalty of the bureaucracy, Lukashenka is starting a game of careful balancing. By sacking one person from each of the three large bureaucratic bodies (the presidential administration, the executive, and the head of a major state-owned industrial complex), he is sending a signal that no official can feel secure anymore.
With his unwillingness to prosecute any of them while pumping more money into the industry with a track record of waste, the strongman is making a placatory gesture to the silent bureaucratic majority, which is hoping to survive another fit of the ruler’s rage.
When leaving Barysaudreu, Lukashenka announced a new wave of inspections at the recently modernised enterprises. To fulfill his promise, the following days saw snap inspections at woodworking companies in the Vitsebsk region. By making good on his threats, Lukashenka is trying to affirm his political stand and may also achieve some limited economic effects.
Alexander Lukashenka has enough power to exercise complete ascendancy over all the tiers of the ruling elite. However, both sides are also aware of the fact that at the time the president cannot afford across-the-board repression against the political elite. Under the circumstances, Lukashenka will probably aim for an uneasy cohabitation with the elites, while at the same time putting them under increasingly more and more pressure.
The main lesson from the president’s recent visit to Barysaudreu for the Belarusian elites is that despite the mounting failures of Lukashenka the manager, Lukashenka the politician is showing no signs of either losing his political instincts or loosening his firm grip on power.