Setting Up an NGO in Belarus: Challenge Yourself
Earlier this month the Belarusian authorities refused to register yet another human rights organisation called For Just Elections (Za Spravedlivye Vybory). To put it mildly, the three reasons for the refusal are odd: none of them seemed to be based on Belarusian legislation.
In addition, on 8 May 2013, the Tell the Truth campaign headed by ex-candidate for presidency Vladimir Nekliaev applied for state registration as a public association for the third time. Two previous attempts ended in refusals. As the campaign’s activists commented before, “This year all the documents are prepared competently and thoroughly. If the registration body refuses registration, it will be a political decision”. The registration body again declined their registration.
In Belarus, the application procedure for the registration of a public association (the main type of NGO based on membership) remains among the most complicated throughout the post-Soviet region. Barriers to entry vary from high minimum membership requirements to long decision-making processes on registration. Further still, even the successful passing of all these ordeals does not guarantee one's registration.
The strict Belarusian rules on public associations have quite specific results. On the one hand, they encourage Belarusian public activists to comply with the legislation’s requirements with a maximum of attention and seriousness. On the other hand, the existence of many organisations acting without registration in Belarus highlights the noncompliance of Belarusian laws with the basic principle of freedom of association.
Unlawful refusals to Tell The Truth and For Just Elections are no news for Belarus. In 2012, the Ministry of Justice registered 12 new international and republican public associations, while 19 associations of the same type received refusals.
The NGOs unwanted by the Belarusian government can find other ways to operate in Belarus. For instance, instead of registering a public association, activists can set up an institution — another organisational form for NGOs. It does not allow broad membership, but its registration procedure is much simpler. However, the state authorities can liquidate institutions easily as well.
Belarusian NGOs Abroad
Belarusian NGOs increasingly recourse to registration abroad. The Belarusian Institute For Strategic Studies, Assembly of NGOs, Centre For Transition Studies, and Palityčnaja Sfiera are just a few examples of NGOs operating in Belarus, but set up in other countries.
A brief outline of classification of Belarusian NGOs abroad offered by Belarusian lawyer Yury Chavusau is of particular interest here. Among others he singles out:
- NGOs that only need the status of a registered organisation. The status of a registered organisation is necessary to avoid sanctions for operating without registration based on Article 193-1 of the Criminal Code. The brightest example of NGOs of this type is Young Front registered in the Czech Republic;
- NGOs willing to circumvent restrictive Belarusian legislation on foreign aid. Belarusian rules on foreign aid require compliance with a long list of bureaucratic procedures, and in certain cases will even make receipt of foreign grants impossible. Registration of a foreign organisation abroad allows evasion of the difficulties. This category of Belarusian NGOs abroad is the largest;
- NGOs originally created abroad to implement activities not possible to carry out in Belarus. For example, the Belarusian Human Rights House in exile in Vilnius founded for hosting annual Belarusian human rights schools, other seminars and conferences, etc.
Those who venture to get registered as a Belarusian public association should remember that barriers arise at almost every stage of the process.
Four Challenges of the Registration Procedure
Besides being ready to apply repeatedly for registration, setting up a public association also requires considerable resources: people, finances, expertise and time.
People. The wish to carry out activities across the whole territory of Belarus can make finding human resources a hard task. The founders will need at least 50 Belarusian nationals. The minimum number of founders for a local public association is ten people, but all of them must be permanently living in the respective territory. Legal entities cannot be founders of public associations.
Money. After finding the people, the restless activists have to think about money. State registration of local public associations and foundations costs the same as for commercial organisations. A national or international association or foundation, however, is required to pay twice the fee of the national commercial entity (approximately $124). Additional expenses include fees for registration and for securing a legal address. The address cannot be the flat or house of its founder or anyone else. As a rule, initiative groups have to rent an office or part of one – which rarely costs less than $40 per month.
Expertise. The pre-registration stage arrives: preparation of more than a dozen of documents in accordance with numerous mandatory requirements, including using the font and the right size of margins. Registration authorities do not advise on the documents’ correctness. As a result, if they subsequently find any faults (however minor) in your documents – they will use them to justify their refusal to register an organization. Moreover, after all reported faults are eliminated and the same set documents is submitted, registration body can refuse again – on different grounds.
Still some valuable assistance in drafting the documents for registration comes from other Belarusian non-governmental organisations such as Lawtrend. Those unaware of Lawtrend’s services will either bear additional expenses for legal advisor, or should reconcile with the idea that this application round is not the last for them.
Time. It takes registration authorities one month to make a decision on the registration of a public association. The state authorities can prolong the term for one more month, if desired.
Registration By Any Means
Whatever difficulties Belarusian public associations face on their way to registration, it is worth completing. Public associations’ operation without registration are illegal and can entail criminal liability.
In 2005, the notorious Article 193-1 became a part of the Criminal Code of Belarus. According to it, participation in activities of unregistered public association results in a fine, or arrest for up to six months, or a prison term of up to two years. The same rule applies to other types of NGOs.
So far Belarusian courts have used Article 193-1 for verdicts against 18 activists. State authorities often notify the civil society activists of the possibility of the Article’s application, using it as a threat. Only during April 2013 Belarusian state authorities notified three civil society activists of the possibility to qualify their operation as falling within Article 193-1’s scope.
Strikingly, with all these troubles Belarusian public associations still get registered and operate: as of 1 January 2013 their number all over the country reached 2,477. Links to the state explain why many organisations manage to get registered. Others managed to register because of the strong motivation and determination of its founders – the leaders of Belarusian civil society.
Belarusian Economy in May: Are We in Recession Yet?
Despite the united efforts of the government and the National Bank, the economy is growing very slowly. Belarus remains an economic wonderland.
But if several years ago the growth rates were miraculous, today the miracle is the absence of growth under the expansionary monetary policy and stimulation of investment. Is Belarus in a development recession?
The GDP report in mid-May disappointed once again: a growth rate of 2.5 per cent in January-April not only fell short of official forecasts, but was also below the previously reported rate of 3.5 per cent from a month ago. For a developing country, which was growing at an average rate of 7 per cent for over a decade, a growth of 2.5 per cent is a recession.
A deeper look at the GDP numbers give even more reasons for concern. If we deduct net taxes from the GDP, we get a gross value added measure that is growing even slower – only a rate of 1.2 per cent. Taxes contribute significantly to GDP growth, and it is difficult to say why precisely (most probably the cause is due to changes in accounting procedures). But the important thing to notice here is that economy is producing only 1.2 per cent more in terms of goods and services, and the rest of the growth is due to the fact that government is collecting more indirect taxes.
Manufacturing, a driver of growth in the past, declined at a rate of 1.7 per cent, despite increases in inventory stocks. Now agriculture and trade drive growth. Agriculture is one of the few industries benefiting from exports. Trade is mostly fuelled by an increase in real wages, which, again, grows faster than labor productivity. Since high growth in wages is not sustainable, the future long-term growth in trade also does not seem probable.
The government’s hopes of high growth were linked with an increase of exports. Exports, however, did not grow as much as planned, and for some industries it even decreased. Exports of all goods and services declined 17.9 per cent in the first quarter (in contrast with the official forecast of 15 per cent growth). Of course, the major blame goes to oil- refinery products: after the ban on the export of certain refinery goods the exports in this category declined from $4,162.4m in the first quarter of 2012 to $3,304m in the first quarter of 2013.
But export declines are visible over all the main exporting branches of the economy, with the lucky exceptions of dairy products and potash fertilizers. There are two major reasons for declines in non-oil exports. The first one is continuing economic slowdown of the major trading partners of Belarus – Russia and the EU. The second being the real appreciation of the Belarusian ruble. The nominal exchange rate was relatively stable throughout the past year, while inflation was positive. As a result, Belarusian exporters became less competitive on foreign markets, as they face increasing costs and cannot compete with the prices.
Table 1: Official Forecast and Reality: Some of the Economic Indicators
1st Quarter 2013
Official Forecast for 2013
GDP growth rate
Labour productivity growth rate
Exports of goods and services, growth rate
Foreign direct investment, $ bln
Real incomes, growth rate
*Jan-Apr 2013 versus same period last year
The other side of the coin is the increase in imports. Decrease in oil imports explains the overall imports decline, but other types of imports increase. In part this increase is fuelled by the modernization program, which boosted the demand for imported investment goods. But the imports of consumption goods are also increasing. The major reason behind this growth is the increase in real wages (up 22.4 per cent in the first quarter of 2013 versus the same period last year), which surpassed the increase in labour productivity (up 4.5 per cent only).
On the one hand, higher wages stimulated the demand for imported goods, which are often perceived as of a higher quality. On the other hand, higher wages without growth in productivity imply higher costs, and it makes the domestic goods less competitive even in the domestic market. Any attempts to cut consumption imports with administrative measures (like setting administrative sales objectives for retailers) will have a limited effect at best.
Foreign Investments and Foreign Reserves
Macroeconomic stabilisation has born its fruits – foreign direct investment in January-April 2013 nearly tripled compared to the same period last year, growing from $583m to $1,507m. The largest share (88 per cent) of foreign direct investment went to enterprises that are not under direct control of any government agencies.
But the government continues to create precedents that worsen the investment climate in Belarus and its perception by foreign investors. In the notorious case of Ecomedservice, government quickly overtook the successful medical business after the death of a patient, without waiting for any judicial decisions. Even if the management of Ecomedservice were indeed responsible for the death (which should be established in court), the imminent and seemingly permanent government takeover may raise concerns by potential investors, both within the country and abroad. What if something happens to your business, will it also be nationalised without court orders?
The inflow of foreign investment is very timely: this year Belarus has to repay a lot of debts, while the foreign trade balance worsens. During April the foreign reserves of the National Bank grew by $106.2m. The arrival of a 440m transfer from the EvrAzES Anti-Crisis Fund contributed to the growth of the reserves in the month when Belarus had to repay $261.8m of an IMF loan.
Would the National Bank be able to sustain its level of reserves without international loans? Improbable. The only possible solution is the privatisation of state enterprises. But today the privatisation to Russian government-run corporations (for example, the possible sale of the government share of VTB bank to its Russian counterpart) is the only viable option. But this kind of privatisation lacks the needed merit-based kind of effective owner it is seeking, as Russian government corporations can hardly be considered effective.
Kateryna Bornukova, BEROC
This article is a part of a new joint project between Belarus Digest and Belarusian Economic Research and Outreach Center (BEROC) – a Minsk-based economic think tank.