Belarus Tightens Media Control to Prepare for Election
Last month Belarusian authorities continued their offensive against independent media. An amendment to the media law, in force since 1 January, tightened the state's control over the Internet.
Eight days later, the state ordered the confiscation of profits from an independent publisher (Lohvinau). On 19 January the Ministry of Information used the tragic shooting at the French satirical newspaper Charlie Hebdo to warn its domestic media of the risks of free speech. And on 26 January the Supreme Court rejected an appeal by the independent newspaper Narodnaya Volya against the Ministry of Information’s warning.
Information control has long been Minsk’s preferred approach to coping with economic problems and swaying public opinion ahead of elections. While independent newspapers can be easily purchased in the street and all websites are accessible from home computers most of the time, the state frequently harasses media outlets so they know “who the boss is." This time, however, its heavy-handed approach may inadvertently strengthen the influence of Russian media in Belarus.
Tightening Grip over the Internet
As a growing number of Belarusians seek information online, the Belarusian state has sought to limit dissent in the Internet. The amendments to the 2008 law on the Media that came into force on 1 January seeks to regulate the distribution of media products online.
They also expand the state's power to block Internet resources. While previously only the propaganda of war, violence, cruelty, or extremism could be blocked, now any information that can harm Belarus’s "national interests" may trigger the shutting down of a website.
Materials published as far back as three months can serve as grounds for blocking. As Andrei Bastunets, Deputy Head of the Belarusian Association of Journalists, notes in a 23 January article in Foreign Affairs, a broad interpretation of the law would put even foreign websites within the reach of state censors. Additionally, web hosts can now be held accountable for all comments posted on their websites.
The changes were adopted without public discussion and supplement the legislation that has already left little space for freedom of speech. Starting in 2010, customers at Internet cafes were required to present passports and register. In turn, Internet providers had to collect customer information and install search and surveillance systems. Websites catering to Belarusians had to be hosted exclusively on domestic servers.
While seeking to rein in independent media, the state is stepping up its own online presence. Minsk is about to launch an online media portal aggregating information from all governmental media on the Internet.
The portal is supposed to serve as a “source for all professional information” about Belarus, according to Deputy Information Minister Vladimir Martusevich. Unsurprisingly, independent media outlets were not invited to join.
Stifling Print Media: Narodnaya Volya vs the Information Ministry
The new focus on Internet censorship is not distracting the Belarusian authorities from their harassment of print media.
On 23 January, Belarus’s Supreme Court ended the proceedings in the case of Narodnaya Volya against the Ministry of Information. Narodnaya Volya, an independent newspaper with a circulation of 55,000, lost its appeal against the Ministry’s warning that it was spreading false information.
On 3 October 2014, Narodnaya Volya received a warning for the column “Chained,” written by senior editor Svetlana Kalinkina. Kalinkina wrote that Belarus would be unable to leave the Eurasian Economic Union (EEU) upon ratifying the agreement, citing Article 13 of the Union Treaty that stipulates that withdrawal decisions are made by "consensus minus the vote of the Member State" seeking to leave.
“Once you sign up – it's forever,” she concluded, thus drawing the ire of the Ministry of Information. The Ministry pointed to conflicting article 118 of the ratification agreement.
As this was already Narodnaya Volya's second warning, the Ministry of Information can exercise its “legal” right to shut down the paper.
At President Aleksandr Lukashenka's 29 January meeting with the press, the newspaper's editor-in-chief, Iosif Seredich, complained directly to the President about the harassment his newspaper had suffered at the hands of the Ministry of Information. Lukashenka said he would look into the matter and went as far as to promise to meet with Seredich personally.
Exploiting the Charlie Hebdo Tragedy to Taunt Domestic Media
In its attempt to control information, Belarus did not hesitate to exploit the shooting at Charlie Hebdo on 7 January. Although the Ministry of Information did not explicitly prohibit reprinting the caricatures, it later threatened to “analyse” the domestic media’s “reaction” to the events in Paris. On 19 January, Minister of Information Lidia Ananich said at an online conference that outlets reprinting the cartoons would be “publicly reprimanded.”
Were the “public reprimand” to take place, it would affect kuku.org, which reprinted some of the most controversial images, and Vitebskiy Kurier, which published some of Charlie Hebdo’s earlier caricatures.
What is more, three participants of the solidarity action with Charlie Hebdo in front of the French embassy in Minsk on 11 January were charged with participating in an “unsanctioned mass action.” Interestingly, when asked about the charges by BBC journalist Tatsiana Melnichyk at the 29 January press conference, Lukashenka said he did not consider a four-people action problematic and promised to look into the matter.
Three days later, the court proceedings for the former editor of the satirical newspaper Novinki Pavel Konovalchik, the leader of the United Civic Party Anatoly Lebedko, and the deputy of the Green party Dmitry Kuchuk were cancelled.
Such an unexpected denouement suggests that the president has decided to play good cop, leaving the bad cop role to the Ministry of Information. Lukashenka's ostensible concern about Narodnaya Volya at the same press conference confirms this impression.
Media outlets that reprint controversial images in Belarus have been prosecuted before. In 2006, the independent newspaper Zgoda published Jullands Posten’s cartoons of Muhammed. One of its editors, Alexander Zdzvizhkou, was sentenced to three years in prison "for “inciting racial, national or religious hatred" but released after a month.
Undermining a Potential Ally?
The intensification of media control can be seen as Belarus's preparation for the presidential election on 15 November. A contributing factor is the poor state of the Belarusian economy, which may follow that of Russia into a recession in 2015. Real wages are declining and the ruble has plummeted.
As soon as the government slapped a 30% tax on foreign currency purchases in December, several non-governmental informational resources were blocked. It is precisely such ad hoc solutions to economic turbulence that the amendments to the media law facilitate.
Yet today it is Russian state media, which propagates the idea of Belarus's belonging in the Russian world, that presents a more immediate challenge to Lukashenka's rule. Restricting Belarusian independent media in the current geopolitical circumstances may thus inadvertently strengthen the increasingly aggressive Russian influence.
The Government is Preparing for a Recession – Belarus Economy Digest
For 2015, any positive growth would be considered a great success for the Belarusian authorities. Apart from external shocks, several structural challenges have emerged.
A spike in inflation, deeper depreciation of the national currency, the distress of the banking industry, and growing unemployment have all become urgent issues that must be addressed.
The government is trying to formulate a coherent response to all of these issues. So far the signals from the government suggest it is going to focus on tools of direct administrative control.
Economy in 2014: Weak Growith
In 2014, the Belarusian economy grew by 1.6%. Weak GDP growth demonstrated once more that the Belarusian economy has all but extinguished its potential for high growth. In other words, prior structural weaknesses continue to plague the economy.
However, cyclical factors also contributed to weak growth. In the spring and autumn a slow, but uneasy recovery took place. Since autumn, the economy started to suffer from lower demand from Russia, cheaper oil prices (which it re-exports from Russia), and deterioration in domestic agents’ expectations. Finally, in November and December, these factors overwhelmed the weak roots of the economic recovery. Since then, the Belarusian economy has started to dip into a recession again (see Figure 1).
Preconditions for a Recession in 2015
In 2015, the environment for the Belarusian economy will deteriorate further. First, a recession in Russia seems all but inevitable. During the last couple of weeks a majority of forecasts for the Russian economy have come to the consensus that its GDP is going to shrink by 3-5% in 2015. For Belarus, this means that the country can expect a further contraction in demand from Russia.
Second, Belarusian exports in Russia will suffer from a lack of price competitiveness. Despite the depreciation of roughly 40% against major currencies, price competitiveness is far from its ‘normal’ standing. For instance, the real exchange rate of the Belarusian ruble vs. Russian ruble remains much higher (15-20%) than it was just a few years prior. This will contribute to a further contraction in exports.
Third, real wages are declining due to wage policy restrictions and price growth. Reducing real wages will determine if a downturn in household consumption will unfold.
Fourth, the overall financial fragility, generally negative expectations, and high level of uncertainty will make banks more reluctant to provide new loans. Interest rates will be unaffordably high for a majority of comapnies (as of today, a lower threshold for nominal rates for ruble loans are hanging hesitatingly around 55% per annum). While other sources of financing capital investment are hardly accessible, capital investments will undergo a further contraction.
The 'internal reserves’ for a majority of companies, especially state-owned ones, have already been exhausted Read more
Fifth, the financial position of companies has become another serious concern. Due to their sagging competitiveness, the profitability of Belarusian companies not dealing with finance has remained very low. The 'internal reserves’ for a majority of companies, especially state-owned ones, have already been exhausted. Hence, many companies will either need one or another form of financial support (permission to raise prices, access to cheap loans, etc.), or will have to layoff employees.
Sixth, no affordable external loans are directly available as of today. Access to the IMF’s funds requires a strong commitment to structural reforms. New loans from Russia are hardly accessible, unless both parties agree on a new political deal.
Yesterday’s Problems May Look Like Success Today
The official forecast from the Belarusian government projects around zero GDP growth in 2015 (0.2-0.7%). However, it also assumes a more favourable environment than really exists at present. Taking into account the preconditions above, a recession is much more likely. However, projections for 2015 are still not clear. They depend on the extent and speed of the new problems that could soon appear as well as the government’s response.
First of all, there is the issue of an unstable and unpredictable exchange rate. Fundamental factors at play will push further rouble depreciation. The latter may cause a new round of financial stress on the deposit market. However, the National Bank is still demonstrating a lack of clarity in its intentions. On the one hand, it is claiming to support a free floating currency regime. On the other hand, it fears a deposit withdraw shock, which could adversely affect exchange rates as well.
Another issue is the relatively huge price overhang that has formed during last month Read more
Another issue is the relatively huge price overhang that has formed during the last month. If there were no price controls in place, the most optimistic projection for CPI inflation in 2015 would be 30% (official forecast project 12%). This kind of inflation will cause an additional push towards further depreciation. At the same time, long-term price controls will only enhance companies’ weaknesses and lead to a deficit in some commodity segments.
The poor financial standing of companies will require new financial injections. Moreover, deteriorating liquidity and a growing number of non-performing loans will push banks to seek cash injections too. This may result in pressure on the National Bank to soften its monetary policy. But the latter may become yet another trigger for a inflation-devaluation spiral.
So, the puzzle is extremely complicated and no good solution seems to be at hand. There are only really three major solutions still on the agenda. First, is the immediate launching of structural reforms, which will open access to cheap external funds (like, to the IMF) that are able to help mitigate the recession. In this scenario, a drop in GDP in 2015 might be significant (down to 10%), but in the long-term things could become much better.
Second, a ‘forced’ monetary softening that presumes new massive liquidity injections. Under this scenario, GDP growth rate may fluctuate around zero for 2015. But an inflation-devaluation spiral and a gradual disorientation of financial markets will be inevitable. However, the fresh memories of an inflation-devaluation spiral in 2011-2012 makes this scenario less plausible.
Third, a massive increase in administrative controls, which includes control of prices, imports, employment, wages, etc. In the view of the authorities, direct price controls may neutralise further depreciation. Direct import controls may help compensate for export losses, etc. Direct control over wages and employment may also help Belarus avoid a sharp growth in unemployment.
For the short-term, this solution may be effective in the sense of mitigating a recession and the associated outcomes of well-being. This scenario may secure either near zero GDP growth or a modest decline (down to 3%). However, for in the long-term it also assumes huge risks, beginning with a more fragile financial system up to significant losses in growth potential. As of today, the government is hesitating on whether or not to proceed precisely with this option.
Dzmitry Kruk, Belarusian Economic Research and Outreach Center (BEROC)
This article is a part of a joint project between Belarus Digest and Belarusian Economic Research and Outreach Center (BEROC)