About us     Activities     Announcements     Contacts 
 Other countries
 Reviews of the press
 Summer Academy

   We recommend:

   Our sponsors:

Other countries
  What does Lukashenka need? A whip or a candy?

Èeslovas Iðkauskas, political analyst
2011 06 20

Although Belarus tried to demonstrate its resistance to the global crisis, now the country appeared in the epicenter of crisis: primary commodity prices increased, the standard of living declined and there is apparent lack of foreign currency. Minsk is feverishly looking for creditors and is forced to apply to Moscow and the West for help.

According to Russian Vedomosti, between 75-80 percent of Belarus' economy remains in state hands. Lukashenka is trying to prove that the command economy is capable of coping with crises. So far he managed to control the situation. According to the statistical data, the country’s economy has been growing annually at 7,3 percent in 2000-2010.  Minsk coped with this growth since Belarus profited from importing Russian oil at preferential prices. The oil was processed and oil products exported to Europe at global prices. By doing this Russia subsidized Belarusian economy and these subsidies amounted to 8 percent of GDP.

The times changed and now Moscow is raising energy prices to all countries, including Belarus. This resulted in inflation which has increased by 20 percent in five months; moreover, the average wage has decreased from 500 to 300 USD. At the beginning Belarusian Ministry of Finance announced that inflation in 2011 will make 77 percent, but later it revised the forecasts and informed that this indicator would reach a point of 39 percent. Nevertheless, this is a significant price jump. This led to a roughly 35 percent devaluation of the Belarusian ruble (according to other sources – 56 percent).

Is there any medicine against this “sickness”? According to experts, only privatization can “cure” Belarusian economy. The Eurasian Economic Community’s (EurAsEC) anti-crisis fund agrees to give a loan, but Belarus has to fulfill one requirement  - to privatize state assets (the price of twelve largest Belarusian state companies might amount for 50-80 billion USD). When on 31 May Belarusian Government turned to the IMF with a request to grant a stabilization credit of 3.5-8 billion USD, one of its conditions to Belarus was privatization.

Russia’s credit conditions for Belarus are similar. During the meeting of finance ministers of Eurasian Economic Community (EurAsEC) in Kazakhstan, Russia agreed to extend a loan to Belarus of up to 3 billion USD over ten years. In return, Minsk will have to privatize state assets for 2.5 billion USD for the next three years.

According to the Swiss newspaper Neue Zuercher Zeitung, Lukashenka is not happy about the loss of gas pipelines, oil refineries and the potassium fertilizer plant  Belaruskalij, but he is not going to submit. Upon his return to Minsk, he started denying the fact of negotiations on privatization of state assets for 7,5 billion USD in Kazakhstan.

According to Nikolay Radov, an analyst of the agency Regnum, Belarusian Government made so many mistakes in recent months (including propaganda mistakes), that today nobody can understand where is a way out of crisis. Lukashenka announced that not a single enterprise will be sold without his consent and that he would not allow “bandit privatization” in the country. Batka raised the dilemma: the assets of the country will be either privatized by Russian dealers and Belarus will become part of Russia, or Belarusians will themselves buy up state assets.

Vedomosti reminds that in 2007 Russia tried to impose a 100 percent tax on oil to Belarus, but after a short war of words Minsk negotiated lower oil prices for the coming three years. However, the economic situation in Belarus didn’t improve and after the expiry of the preferential term, Russia imposed a 100 percent tax on major part of the supplied production.  Straight away the Belarusian trade balance deficit reached 15 percent of GDP; moreover, Belarus is running a current account deficit of about 16 percent of gross domestic product. Today Minsk receives duty-free oil from Moscow, but it has to pay customs duty on crude oil deliveries to the Russian budget.

According to Belorusskie novosti, there is no way out for Lukashenka and economy of the country will be swallowed by Russia. By selling the country’s most important enterprises Minsk could settle accounts with foreign creditors, but it will loose independence.

Surely, Lukashenka wants to forget the night of December 19 when at least 600 people were sentenced to short jail terms for participating in the protests, among them five candidates to presidents. Russia and IMF do not relate these repressions to the allocation of credits to Minsk, but the world community should finally find out what Lukashenka needs more: a whip or a candy. The Western policy shouldn’t be confined to two extremes: whipping or feeding Lukashenka with dollar sweets.

Copyright: it is obligatory to indicate www.geopolitika.lt as a source in reprinting or otherwise using www.geopolitika.lt material.

   Print version
  Article has no comments

Enter code:  

Use of juvenile, nonsensical and vulgar language prohibited.

Ukraine has filed a lawsuit against Russia in the International Court of Justice for terrorism and racism (68)

2017 01 19

The Ministry of Foreign Affairs of Ukraine filed a lawsuit in the UN International Court of Justice against Russia within the framework of the International Convention for the Suppression of the Financing of Terrorism and the International Convention on the Elimination of All Forms of Racial Discrimination, says the site of the Foreign Minister. This is done on the instructions of the President of Ukraine Petro Poroshenko, issued on 16 January.

National Armed Forces (NAF) of Latvia will deploy additional military units in three cities (85)

2017 01 18

For effective complex defence of Latvia, the establishment of a permanent division of the National Armed Forces has started in Latgale, reported the official website of the Ministry of Defence.


In Lithuania the amount of 110 thousand Euros was collected at a concert in support of the ATO fighters and residents of Donbass (39)

2017 01 17

On 13 January a concert "Together to the victory" was held in Lithuania, where the audience decided to support Ukraine's defence and donated 110 thousand Euros.


Belarus has established a visa-free regime for citizens of 80 countries (2)

2017 01 10

Alexander Lukashenko on 9 January signed a decree № 8 "On the establishment of visa-free entry and exit of foreign nationals." The document establishes visa-free entry to Belarus for a period not exceeding 5 days at the entrance through the checkpoint "National Airport Minsk" for citizens of 80 countries, - reported the press service of the President of Belarus.

The European Parliament approved the recall of visas for citizens of Ukraine and Georgia (3)

2016 12 19


The European Parliament approved the granting of a visa-free regime for short-term trips to the citizens of Ukraine and Georgia, RIA Novosti reported.



Copyright: it is obligatory to indicate www.geopolitika.lt as a source in reprinting or otherwise using www.geopolitika.lt material!

© 2005-2017 Geopolitiniø Studijø Centras