ARCHE under Threat, Sannikau in London – Digest of Belarusian Politics
The Independent Institute of Socio-Economic and Political Studies sparked angry opposition reactions with its fresh opinion polls covering recent parliamentary elections. Former presidential candidate Andrej Sannikov was granted political asylum in the UK. Mediakritika published top 10 Belarusian hits on youtube, and Budzma’s animation is among the top. Activists have tried to preserve the integrity of Kurapaty from a new shopping mall.
IISEPS September-October poll. In September-October 2012, the Independent Institute of Socio-Economic and Political Studies (IISEPS) conducted a public opinion poll covering topical aspects of life in Belarus. The most discussed topic turned out to be the real results of the September parliamentary elections. According to IISEPS 17.4 per cent of respondents had voted early, and 49 per cent on 23 September.
Only 9.6 per cent answered that they had boycotted the elections, and another 24 per cent said they had not participated in voting for other reasons. Some Belarusian politicians expressed distrust in the results of the poll. In their turn IISEPS responded that Belarusian politicians – both opposition and government – see only the figures that favour them.
ARCHE under threat. On 23 October, the evening programme Zona X, broadcast on a Belarusian state TV channel, dedicated a slot to the magazine ARCHE and its editor Valery Bulhakau. Bulhakau was called "the boss of the magazine" and the confiscated books were characterised as "the literature, which smells bad." "The recent events show the commitment to deal with another independent edition," the BAJ Chairwoman Zhanna Litvina commented on the situation.
The economic court of Hrodna region fined Valery Bulhakau for five base amounts (almost 50 euros). The court also confiscated all profits from sales of the ARCHE magazine which amounted to BYR 875,000 rubles (almost 80 euros). The editor was found guilty of illegal business activities. Further, on 2 October, the authorities confiscated more than 5000 books that may be subject to criminal charges. Now Valery Bulhakau has resigned as editor of ARCHE to save the magazine from closing.
Andrei Sannikau granted political asylum in Britain. The leader of European Belarus civic campaign, former presidential candidate and political prisoner Sannikau claimed there was a threat of a rearrest. “It was not an easy decision for me. But believe me I did not have any other choice”, – Andrei Sannikau said.
Database on Polish aid to Belarusian opposition leaked to internet. The internal-use database of the Polish foreign ministry which describes the cooperation and funding of the Belarusian opposition appeared on an American website. The database reveals the information on aid to several countries in 2007–2011, including descriptions of the project and funding with NGOs. Now the data has already been removed from free access.
The People's Program of Belarus in Warsaw. The presentation was organised in the framework of the project "European Dialogue for Modernization of Belarus." At the Belarusian House in Warsaw, Yuri Gubarevich and Sergei Chaly presented the People's program of Belarus, a document aimed to develop a new positive vision for the future of Belarus through expert and public discussion of actual issues of the country's development.
Brussels Declaration of Belarusian oppositionists. On 17 October, twelve Belarusian political groups adopted a joint appeal to the European Union and called upon the EU institutions to engage as much as possible with the cause of democratisation in Belarus. The joint appeal was signed by representatives of European Belarus, the For Freedom movement, Young Front, the Tell the Truth! campaign, Fair World party, For Modernization union, etc.
Petition to protect Kurapaty. A group of activists launched a petition through Change.org website to stop the construction of an entertainment complex "Bulbash hall" in Kurapaty where during the years of Stalinist repression tens of thousands of people were shot and buried. The petition has already been signed by about 1200 people and is being directed to relevant government agencies.
Activists discuss possibility of dialogue with authorities. On 16 October, Belarusian human rights activists held a meeting in Minsk to decide whether they should start a dialogue with the authorities on the need to established a national human rights ombudsman. The initiator of the meeting is the Minsk-based Legal Transformation Center (Lawtrend). The activists noted that Belarusian human rights defenders have always been in favour of establishing an ombudsman's office in the country.
Gomel think tank is under threat. According to the founders of the Gomel independent institute Strategic Thought, the tax services have started checking in relation to the institution because it does not bring revenue, which impedes the profit indicators of the region. Strategic Thought is the first regional community of independent experts, established in 2010 in Gomel.
Activists sentenced to 5 days of arrest. The leader of the Alternative youth initiative Aleh Korban and activist Uladzimir Siarheyeu were detained for activity against propaganda on Belarusian TV. They held a flash-mob putting a TV set with the logo of the first National TV channel and noodles atop and around it. “To put noodles on somebody's ears” in Slavonic languages is an idiom meaning “to tell bold lies”.
Top 10 youtube videos for Belarusians. Mediakritika.by analyses a list of 10 videos, which have "entered Belarusian history". Among the top videos are the famous "I am from a village" music video, an historical animation by Budzma! and Russian-produced series Krestnyi Batka (God Father), dedicated to Lukashenko.
Elections in the media monitoring – Final Report. The Monitoring group of Belarusian Association of Journalists summed up the results of the parliamentary elections coverage. According to the report, unlike all the previous elections monitored by BAJ, both state-owned and independent media lost interest in election related subjects pretty soon after the polling.
Ales Bialiatski, the imprisoned leader of the Human Rights Center Viasna was bestowed Honorary Freedom (Citoyen d’honneur) of the City of Paris.
Belarus Digest prepared this overview on the basis of materials provided by Pact. This digest attempts to give a richer picture of the recent political and civil society events in Belarus. It often goes beyond the hot stories already available in English-language media.
Belarus Investment Climate After Spartak and Kommunarka
According to Doing Business 2013, Belarus is now on the highest level in its history. It occupies the 58th place out of 185 countries. Last year the World Bank named it among the quickest reformers on the way to the “Ease of doing business” goal.
The indices mainly follow from the analysis of Belarusian regulatory acts. What is going on in the country’s business reality is more difficult to reflect. The case of Spartak and Kommunarka revealed the most crucial defect in its economy – disregard to private property rights. So far Belarus has never faced any investor-state disputes.
The de facto nationalisation of Marat Novikov’s and many minor shareholders’ property could go smooth without attraction of the world’s tense attention. Belarusian state machine did its work on Spartak and Kommunarka impeccably. But Lukashenka’s emotional speech of 12 October when he ordered to transfer the reins of power over these almost entirely private companies to the State ruined all efforts to make Belarus attractive for investors.
Spartak and Kommunarka: Start of An Unexpected Journey
The rise of Spartak and Kommunarka as well as their popularity within the former USSR began long before Belarus’ independence. Carried by beliefs for soon-coming market economy, in 1993 and 1994 the government initiated their transformation from state enterprises into joint-stock companies.
The shares were distributed among the state, private investors, and the factories’ employees. An American friend of Belarusian high officials, Marat Novikov, became the main private investor of both chocolate giants.
For years, the initial distribution of shares in the transformed companies could change only slightly. One of the reasons for that was moratorium on sale of employees’ stock introduced in 1998. In January, 2011, the moratorium’s term expired and big investors got a good opportunity to broaden their economic presence in the country.
Novikov did not lose the chance. By 2011, he already owned about 10% of stock in Kommunarka, and several times more in Spartak. That was not his limit. As soon as the moratorium expired, as the former General Director of Kommunarka Natalya Kot says, the company’s employees started to sell their stock to Novikov.
State Machine at Work
The President’s Edict No. 107 adopted in March, 2011 interrupted such deals. City executive committees got the preemptive right to purchase of employees’ shares. The provision applied to relations starting from January 1, 2011. That meant it actually disregarded the universal principle of non-retroactivity of law.
Using the edict’s retroactivity, city executive committees wanted to get back the shares that Novikov had bought from Spartak and Kommunarka employees.
The difficulties on the way to the conflict’s mitigation found an unexpected embodiment in a new claim against the two companies. This time they arrived from by the State Property Committee. The Committee argued that in 1993 the appraisers underestimated values of Spartak and Kommunarka and now the state should get additional shares to restore its interests. In case of Kommunarka, the alleged undervaluation amounted up 50%. The State Property Committee also blamed Spartak for other violations of privatisation procedure.
Commenting on the State Property Committee’s claims, Belarusian economic analyst Yaraslau Ramanchuk says that the new figures of the companies’ value in the early 90s claimed by the state rely on contemporary investments’ amounts and costs of stock. In the economist’s opinion, that is a rude violation of basic principles of economy and law.
However, on 22 August 2012 the High Economic Court of Belarus satisfied the State Property Committee’s claims with regard to both companies. Under the decision, the state’s share was going to increase by means of additional stock issuance.
Shareholders tried to resist the judgements. But their hopes, as well as the hopes of Belarusian businesses looking for foreign investments, crashed after the famous Lukashenka’s orders: to dissolve Advisory Boards, assign state officials as their sole directors, and increase the state’s share up to 57% in Kommunarka and 60% in Spartak from current 22% and 13.09% respectively.
Unlucky Big Businesses in Belarus
Marat Novikov is the person who has suffered from the stock’s additional issuance the most. He lost control over about 34% of stock in Spartak and 22% – in Kommunarka. However, Novikov is not the first to face the specifics of relation to private property in Belarus.
Examples of similar treatment exist with regard to both foreign and national investors. In 2001 the plans of Russian-Sweden brewery company Baltika to invest in Belarusian plant Krynitsa failed, because Belarus suddenly refused to comply with its contractual obligations to the investor. The state’s refusal came after Baltika already invested in Belarus about $10,5mln.
In 2002 McDonald’s had to close one of its most profitable restaurants in Belarus, because the Belarusian State University started construction of a new building on the restaurant’s land plot. The fact that Minsk State Executive Committee had previously leased the land to McDonald’s till 2036 did not prevent the closure.
In January 2011 Belarus took administrative control over a huge furniture joint stock company “Pinskdrev” although it did not own any shares there. In a few months after Pinskdrev, state officials made one of the main stockholders and the director of a Belarusian big tile and sanitary engineering company Keramin to vacate his position. After his retirement, state’s share in Keramin increased from 3% to 57%.
Despite all the troubles, examples of smooth international investment projects in Belarus still exist. American Coca-Cola, German Man, and Holland Heineken are just a few of an already quite a long list of foreign investors who appear to be successful in Belarus.
In fact, foreign investors in Belarus are even in a safer position compared to their local colleagues. The possibility of impartial consideration of their claims against Belarus is the main reason for that.
Since 1992 Belarus is a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. It has entered into bilateral investments treaties with more than 50 countries which provide substantive grantees to foreign investors. Even more, under the new draft law on investments, investors from any country of the world will be able to draw a suit against Belarus to international arbitral tribunals.
Surprisingly, not a single claim from investors was submitted to the International Centre for Settlement of Investment Disputes against Belarus.
It is possible that after investors start to use their rights and initiate international proceedings against Belarus the situation will improve. This way the government will learn that it can be held accountable for its mistreatment of investors.