The Black Tuesday of the Belarusian Economy
This year's devaluation of Belarusian currency was the largest in the world for the past 20 years, according to the World Bank. Independent media already called the day of official devaluation "the black Tuesday". However, Belarusian state media largely ignore this news focusing on the visit of Alyaksandr Lukashenka to Kazakhstan and the Cannes Festival in France.
Yesterday, the National Bank of Belarus lowered its official exchange rate against the dollar by 36 per cent. However, it is still impossible to freely convert Belarusian roubles into foreign currency because very few are willing to sell. That suggests that the market is still unhappy about the official exchange rate. Unable to buy foreign currency, Belarusians are trying to get rid of their roubles by buying consumer goods such as refrigerates, furniture and even stocking up on food supplies. That helps Belarusian producers, but lowers the value of the Belarusian currency even further.
In terms of real income salaries in Belarus have dramatically plummeted. Radio Liberty quotes an employee of MAZ, one of the largest Belarusian state-owned automobile plants, saying that in the past their salary was around US$800 and now it was merely US$200-250. In terms of economic prosperity Belarus seems to be moving to the level of Moldova, one of the poorest countries in Europe. The main reason is that the subsidies from Russia are no longer as generous as in the past, which hits hard the Soviet-style Belarusian economy.
Independent web site AFN.by recalls the old Soviet saying according to which Belarus can be ruled by the one who can resolve its problems in Moscow. This saying is relevant today even more than before as Lukashenka is courting Russian leaders hoping to get money. "Our independence and sovereignty, unfortunately, hangs on these ill-fated energy supplies and raw materials" said Lukashenka during his recent trip to the oil rich Kazakhstan. He failed to mention, however, that it was his policy which made the unreformed Belarus economy so vulnerable.
Belarus already started selling its most precious assets. The recent evidence of that is the sale of the state share in International Potash Company, one of the world's largest exporters of potassium-based fertilisers. It is also reported that Belarus negotiates selling a stake in Belaruskali, one of the largest potash producers, to Chinese investors.
Belarusian weekly Nasha Niva writes about the coverage of the economic crises by Belarusian state television channels. Dramatic devaluation of the Belarusian currency was almost unnoticed by state media. Visit of Lukashenka to Kazakhstan, Icelandic volcano eruption and changes in Ukrainian legislation appeared to be more interesting for Belarusian state television than depreciation of the Belarusian rouble. Not a single senior official gave a press conference on the day of devaluation. Officials avoid interviews as the government is combating the worst economic crises in Belarus since the collapse of the Soviet Union.
The official Russian-laguage "Belarus Today" devotes its front page to the ongoing visit of Lukashenka to Kazakhstan, the Canes Festival in France and election results in Spain. Devaluation is only mentioned on the second page. The largest Belarusian-language daily Zvyazda follows the same pattern. Apparently, this is the consequence of the government policy not to focus media attention on economic problems.
On the political trials front – following prison sentences to several activists, including the former presidential candidate Andrei Sannikau, other presidential candidates were found guilty but released from arrest for the time being. That was the fate of Uladzimir Neklyaeu, Vitali Rymasheuski and four other opposition activists whose trials ended on May 20. However, more opposition activitists are likely to jailed in the coming weeks as trials aginst those who protested against election fraud in December continue.
Who Needs the Eastern Partnership?
While the European Union is yet again considering using sticks against the Belarus regime, it is unclear what carrots it can offer. Lukashenka's opponents often point to the de-facto exclusion of Belarus from the Eastern Partnership after the post-election crackdown. The question is whether Eastern Partnership has ever been of any value for Minsk – economic or political.
Belarusian regime is unwilling to get closer to Europe due to its background and worldview differences. Very often Europe pays only lip service to the Belarusian issue. The head of the European Parliament Jerzy Buzek recently said in Tbilisi that “the worst situation is in Belarus. The EU has shown willingness to dialogue with Minsk. However, the response to our openness was police and prisons for the opposition”.Yet such openness does not cost much in economic and political terms. Politically, the European Union has done next to nothing in its Belarusian policy. No wonder, Belarus borders on no major European state, except for Poland, which has its own problems with the rest of Europe because of its pro-American stance.
The Polish analytical journal 'Nowa Europa Wschodnia' recently published an article criticizing Eastern Partnership. The article authored by Przemyslaw Zurawski vel Grajewski concluded that this EU initiative has never been a serious undertaking. Now it is so hopeless that even Poland which has been one of its main proponents should better put it aside altogether. So what is wrong with Eastern Partnership?
The Eastern Partnership has been conceived by Poland and Sweden in 2008 to respond to the French idea of 'Union for the Mediterranean'. Poland, Sweden and Germany were particularly worried about that French idea. Yet, when Poland and to a lesser extent Sweden were always interested in dealing with Eastern Europe, the German government probably was motivated by competition with France, argues the Polish scholar. This French-German quid pro quo allowed for the European Partnership to proceed behind the realm of thought.
Russian aggression in the Caucasus in August 2008 caused a wave of protests in the West which created a favorable momentum for the new European policy towards post-Soviet nations. Yet that shaky foundation has predetermined the future of this endeavor. No other major EU country displayed any interest in it, and even Germany effectively disengaged itself by the very first summit of the Partnership in Prague, in May 2009. Germany did not send any high rank officials to that meeting, reminds Zurawski. Russia again became an acceptable partner for the EU. Strong Eastern Partnership risked to become just a nuisance in the EU-Russian relations.
No wonder, that the Eastern Partnership initiative failed to receive significant financial support from Brussels. To fund cooperation with all six Eastern European countries the EU was willing to spend just 85 million Euro in 2010, 110 million in 2011, 175 million in 2012 and 230 million in 2012. And though further funding can be available from other parts of the EU budget, it is obvious that the Eastern Partnership was never at the top of the EU agenda.
It appears that the only serious proposal to Belarusian government was made during the visit to Minsk by foreign ministers Sikorski of Poland and Westerwelle of Germany prior to the 2010 presidential elections. They offered 3 billion Euro for election process minimally acceptable for the EU. Belarus authorities eventually decided that it would be a suicidal move for them to follow those minimum standards. Instead, Lukashenka is hoping to get financial support from Moscow without taking the dangerous European route. Ironically, he hopes now for the similar sum from Moscow, and has also to accept some not completely disclosed conditions which may be not less dangerous for his political survival than the Polish-German proposal.
It is clear that at the moment and in the foreseeable future the EU is unlikely to make any major changes in its policy towards Belarus. Perhaps, only the threat of total economic collapse and political instability in the country will make the European politicians change their minds. Jerzy Buzek pointed out other potential troubles that the Belarusian regime may cause, “what is attempted there will be copied by other countries in some other regions of the world. Belarus is becoming a social and political laboratory for non-democratic forces. This is why we cannot be indifferent”. Do not forget, however, he is Polish and very often Polish voice has been neglected by western Europeans.