Looking Back at Lukashenka’s Fourth Term
On 11 September candidates for Belarusian president officially started their campaigns. From the previous presidential campaign slogan “For independent, strong and prosperous Belarus”, Lukashenka left only “independent”.
In order to buy voters in 2010, Lukashenka embarked on excessive wage growth in the public sector, while exploiting international reserves to sustain the Belarusian ruble. However, this year, given the shortage of resources Lukashenka has to abandon his policy of cheap populism.
Despite promises in 2010, there has been no change in economic freedom, the private sector share in GDP remains at a minimum, and the number of the small and medium enterprises still remains low.
Belarus Moves Away From Populism
Until recently Lukashenka focused his election campaigns primarily on raising living standards. The authorities and society had an unwritten “social contract”. Lukashenka who has ruled the country for over 21 years substituted the lack of political change with a substantial increase in social welfare.
Lukashenka's current fourth presidential term has become his worst Read more
In each presidential campaign since 1994 Lukashenka had vowed to increase the populace's average wage by the end of that presidential term. So far, the economy in 2001 and 2006 delivered the expected outcome with ease, while in 2010 artificial help from the officials was needed. In 2010 Lukashenka promised to raise the average monthly wage to $1,000 by 2015. Yet, in July the average salary fell below the level that was reached by the end of 2010.
For the first time Lukashenka is running for re-election without any commitment to guarantee a certain wage. Unfavourable external conditions and the ineffectiveness of the Belarusian economy, has left the authorities with no sources to boost the economy in the near future. Minsk has simply no extra money to buy voters.
Economic Stagnation Instead Of Bright Promises
Lukashenka's current fourth presidential term has become his worst. In early 2011 the Belarusian authorities forecasted that GDP would increase by 62-68 per cent by the end of 2015. In reality, growth will likely only hit 6 per cent. The discrepancy between the official forecast and the performance of main economic indicators affects all other measurements.
The Belarusian economy faces a systemic crisis. In the period 2001-2008 economic growth amounted to 8.8 per cent annually, while in the period 2009-2015 growth was limited to 1.9 per cent. With such a performance the economic gap between Belarus and the EU, measured by GDP per capita on Purchaising Power Parity (PPP), has remained unchanged for the past five years. That has disappointed many Belarusians who are the absolute leaders in the world on the number of Schengen visas per capita. Through access to the EU, Belarusians can compare the living standards at home and abroad.
Minsk has avoided reforming the economy in the past five years. According to the main national forecasting document, the Socio-Economic Development Programme for 2011-2015, Belarus had to join the Top-30 countries in the world for the ease of doing business by 2015. However, Belarus’ position in the World Bank ranking has barely changed as the table below demonstrates. Despite promises, experts saw no change in economic freedom, the private sector share in GDP, and the share of small and medium enterprises.
The Doomed Future of The Belarusian Economy
During Lukashenka's current term for the first time since 1995 Belarus has experienced a recession. In January-July 2015, GDP plummeted by 4 per cent year-on-year. In addition, the IMF forecasts a minor recession in Belarus in 2016 (-0.1 per cent).
Lukashenka faces rising unemployment, the unpredictability of the automotive industry, a shorter working week in many industrial plants, declining real wages, and currency devaluation by 50 per cent since the beginning of the year. How to solve them remains unclear, and Lukashenka keeps silent about this.
The Belarusian economy in 2015 is more unstable than in 2010. In 2006-2010 the US dollar in comparison to the Belarusian rouble went up by 40 per cent, while in 2011-2015 the currency rate grew six fold. A similar deterioration happened in regards to inflation. Furthermore, Belarus has become more vulnerable to external shocks. The international reserves have decreased while foreign debt has increased.
Light At The End Of The Tunnel
Minsk seems to have learnt a lesson that populism has ruined the economy since the last political cycle of 2010. The new government, elected at the end of last year, has conducted in 2015 quite a reasonable economic policy which has gained positive feedback from representatives of the international financial institutions. Since the beginning of 2015, each IMF mission, the World Bank and the Eurasian Development Bank has praised the new authorities for a responsible economic policy.
On the positive side, the Belarusian government consciously decided to control the economy's total foreign debt. Because of that the foreign debt in terms of GDP has increased insignificantly in the past five years, only by 1.4, from 51.6 per cent. That manifests a profound change in Belarusian economic policy in comparison to the second half of the 2000s when foreign debt increased dramatically.
Belarus still has great potential to benefit from liberal reforms Read more
Belarus still has great potential to benefit from liberal reforms. Privatisation of state owned enterprises and a favourable business climate for establishing new entities could support Belarusian fiscal policy and boost the economy. For example, income from the privatisation of one of the biggest Belarusian company's, Belaruskali, could pay off a half of Belarus's total foreign debt.
The standard of living in the recent 5 years has slightly improved. Suddenly, Lukashenka has stopped declaring any progress in the social well-being in the near future. Deeply rooted traditional statement “if only there was no war” and national security issues has replaced economic rhetoric. The reason is simple: Lukashenka has nothing to boast about since no economic prediction for his current 5-year presidential term has come true.
Although many experts often predict the quick collapse of the Belarusian economy, it still allows for small growth. Yet, in the absence of decisive reforms and low oil prices Belarus could stay in stagnation for coming years. However, the stagnation would not bring immediate political changes since Belarusians have accepted living under state propaganda and are afraid of any revolution after the Ukrainian Maidan in 2014.
Time will show whether Lukashenka goes down in history as a reformer or as the captain of a sinking ship.
Civil Society in Focus, Belarusian Opposition, Internet Users – Digest of Belarusian Analytics
According to a recently released report, in 2011- 2015 the civil society sector has seen seen certain improvements although civic engagement in civil society initiatives remains weak.
Another recently-released study concludes that it is impossible to speak of an improvement in the status of CSOs as the state intentionally drives many of them to the periphery of public life.
Other studies analysed the Internet usage in Belarus showing that now over 70% of Belarusians aged 15 to 74 use Internet. A report produced by Warsaw-based OSW concludes that the Belarusian opposition is currently experiencing its deepest crisis since Alexander Lukashenka took power in 1994. This and more in this edition of Digest of Belarusian analytics.
2015 Future Search Report. Pact has released 2015 Future Search Report, based on a working meeting of representatives of Belarus’ civil society. The report notes that despite the post-2010 crackdown on Belarusian civil society and wave of repressions, the period of 2011- 2015 has seen certain improvements. However, the low level of trust towards CSOs amongst the citizenry results in weak civic activeness and participation in CSO initiatives. There is still no regular interaction between think tanks and other civil society agents directly contacting the people.
In spite of the impression of an advanced dialogue culture emerging inside Belarus’ civil society (compared to 2011), civil society organisations still find it difficult to agree even on issues of no principal significance. Some view the government (especially local authorities) as a partner or, at least, a stakeholder whose engagement is a necessary factor of fostering social change. Others continue seeing it as an “enemy” or the “evil necessity”, while real interaction is either impossible or immoral.
The authors argue that preservation of Belarus’ independence and further upturn of demand for national identity and Belarusian and European values should become the answer to the geopolitical situation in the region. The report urges to tie capacity building to the efficiency of CSOs and their ability to better meet the needs of respective target groups and fulfil their missions, i.e. improving the quality of work and outreach.
Belarus Civil Society Organisations In Cross-Sectoral Dialogue: Experts Survey – a major study funded by the European Commission, analysed the current state of interaction between CSOs and government agencies. It shows that CSOs in Belarus must contend with with constant challenges threatening their existence. More politicised organisations have little chance of being registered in Belarus and are accordingly outside the law in terms of the Belarusian legislation. Legal complexities lead to the marginalisation of many CSOs and CSO membership is associated with a number of risks (job loss, expulsion from university, etc.), thus reducing the attractiveness of CSOs for many people.
The report concludes that it is impossible to speak of an improvement in the status of CSOs as the state intentionally drives many of them to the periphery of public life. But despite the hostile environment, Belarusian CSOs demonstrate a high degree of application of different tools for influencing policies, seeking to initiate a cross-sectoral dialogue and managing co-operation with the authorities to achieve their goals.
Internet: Infrastructure, Users, Regulation – Mikhail Doroshevich and Marina Sokolova sum up the key developments in Internet field for the last year. Namely, by the end of 2014, Belarus totaled over 5 million Internet users, which constitutes 70% of the population aged 15 to 74. The Internet is still not available to all, which poses a serious problem when it comes to the offered e-government services. Only half of households have access to the Internet from home computers.
Analytical paper on Belarus’ HR situation for April-June 2015 is published. The report analyses the dynamics of the situation with human rights in Belarus. The analytical report was prepared by Belarusian Helsinki Committee, Belarusian Association of Journalists, Assembly of Pro-Democratic NGOs of Belarus, Legal Transformation Centre, Human Rights Centre “Viasna”, and Committee “Salidarnasc”. English version of the report here.
A Game Played According to Lukashenka’s Rules: the Political Opposition in Belarus – Tomasz Bakunowicz from Warsaw-based OSW believes that the Belarusian opposition is currently experiencing its deepest crisis since Alexander Lukashenka took power in 1994. The report analyses the inability of opposition leaders to develop a long-term political and social strategy which would be adapted to the situation, which does not reflect well on their political maturity.
Furthermore, Bakunowicz notes, the opposition leaders rarely establish genuine co-operation with experts in Belarus. Many of their demands are confined to formulas which have been repeated for 20 years. The failure to select a joint oppositional candidate for the presidential election has proven that not only is the opposition unlikely to threaten Lukashenka’s rule; it will not even be able to demonstrate to society that it could provide a genuine alternative to the present government.
Beyond Politics: Advocacy Opportunities in Today's Belarus – Political scientist Alesya Rudnik argues that there are external political and legal obstacles for advocacy campaigns in Belarus as well as subjective factors of mistrust or disbelief of activists to achieve success. But the key barrier remains the authorities' preferences in selection of advocacy topics and issues – problems of social sphere or infrastructure are more secure and promising. Among analysed campaigns are Budzma, Against the death penalty, In defence of the Belarusian swamps, Public Bologna Committee, etc.
Environmental problems worry 78% of Belarusians. Green Network publishes results of a nation-wide survey performed by SATIO in March – April this year. According to the survey results, most Belarusians (95%) are concerned about price hikes, while low salaries and inflation are among top three issues. At the same time, 78% of Belarusians consider environmental issues to be more pressing than crime and unemployment. Top five environmental issues that worry Belarusians include air and water pollution, consequences of the Chernobyl disaster, illegal dumps and deforestation.
Real Assistance from the EU Can Come in a Few years, Debt Restructuring is More Realistic – True motives of the release of political prisoners are impossible to guess. It is naive to expect the lifting of sanctions against Belarus but even their temporary freeze will allow resuming contacts at the highest level. The most tangible support for Belarus from the West could become a restructuring of debt. These issues are discussed in Amplituda TUT.by program by political analyst Yury Chavusau, BISS analyst Dzianis Melyantsou and CET director Andrei Yegorov.
Belarus-West: "Love" Does Not Come Out – Andrei Porotnikov, Belarus Security Blog, considers Foreign Minister's visit to Ukraine, Vladimir Makei as one of the most important events of August. The significance of this trip "overrides" the current presidential campaign, as the unofficial purpose of the trip is to enlist the support of Mikheil Saakashvili in terms of the restoration of relations between Belarus and Washington.
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.