Alexander Lukashenko Has Called Off the Revolution

December 5, 2013
Photo: Reuters

Nezavisimaya Gazeta, an independent Russian daily newspaper, shines a spotlight on another one of Russia’s neighbors, Belarus. – Ed.

Belarus’s Alexander Lukashenko has acknowledged the woeful state of the national economy, but stopped short of admitting his own complicity in it. Experts regard the failure of the current president’s socio-economic policy as the cause of the economic problems, and are convinced that the dismissal of the government will not affect the situation.

“I want to ask everyone to relax because, for various reasons, things are getting heated in the media and in our society, and therefore there are surely people who have come out as if it is the last day on the barricades; someone is waiting for turmoil.” Thus Alexander Lukashenko began the government meeting on the status and prospects for the economy. “There will be no revolution,” disappointing those who had been expecting rolling news coverage. The president promised that he would refine the make-up of the current government up until the end of the year, but he would sack those who don’t manage to fulfil the adjusted criteria during the first quarter. “It won’t be revolutionary, but evolutionary,” he said.

The fact is that he is going to be sacking, because already, no one doubts that seven out of the nine targets will not be met. In particular, GDP will not increase by 8.5% but, at best, by 1%. Exports will not grow by 15%, instead, they will be reduced by 20%. The balance of foreign trade has already gone into the negative (a $4 billion deficit in commodity trades). Unsold products are accumulating in warehouses, factories are switching to a shortened working week, and salaries are being reduced. It transpires that the top-down funded investment projects weren’t examined from a marketing perspective, and are not giving returns on the investment. “There is ubiquitous bungling, slackness, and ineptitude in organising work. There is a lack of fundamental diligence and efficiency,” judged Alexander Lukashenko himself on the state of the economy.

Expect high profile dismissals, as began when Lukashenko took to the habit of, while on site visits, holding “public floggings” of officials, with dismissals and reprimands live on air. Then we began to hear threats to open criminal cases on certain members of the government for ineffective use of public funds. A little later, the president attempted to alleviate the situation and even gracelessly praised the sacked governor of the Minsk Region, Boris Batura. At the time, local observers suggested that Lukashenko, famous for his outbursts of aggression, had himself realised that he had gone too far and had thought on the fact that soon he would be unable to find any specialists in key government positions.

The second reason to expect the prompt resignation of the government, according to experts, lies in Lukashenko’s need to assign blame for the economic meltdown. Analysts, having thoroughly studied the logic of Lukashenko’s actions for the near 20 years of his rule, suggested that the president would never admit that his socio-economic policy hadn’t worked out. “Intent on participating in the next presidential elections in 2015, he asserts that negligent executives are to blame for the economic failure,” they say.

Judging by the Belarusian president’s statements, he really doesn’t want to be perceived as the one in charge. As a result, there are statements that there will be no government resignation. However, as the experts reckon, Lukashenko simply has no other choices or excuses for the failings of the economy, therefore the current cabinet’s fate is sealed.

Manipulation of public opinion still allows Lukashenko to retain acceptable ratings. As Nezavisimaya Gazeta has already noted, citing data from the Independent Institute of Socio-economic and Political Studies (NISEPI,) more than 40% of the population supports him. Meanwhile, all but a few experts now believe that Belarus shouldn’t take on ambitious growth targets, as it simply lacks the reserves. The country must curtail directed-lending economic schemes and wage rises, as recommended by the IMF, EurAsEC Anti-crisis fund, and independent economists. The young economists tried to get the government to listen to them, but they failed to convince the president. Lukashenko arranged yet another dressing down, reproaching the Myasnikovich-Rumas government for obsessive enthusiasm for market theory, and sent the chief market-evangelist in the government, Sergei Rumas, off to manage the decorative Development Bank, established in due time to fulfill the demands of the IMF to untie commercial banks from government credit programs. This was beside the point, it was just window dressing, a government funded program as always. “Most of the population will only go to shops, as if to the museum, to see what the market economy of Myasnikovich and Rumas looks like.” So Lukashenko scathingly criticized the government’s proposal to tighten monetary policy, announcing a year of modernization, suggesting a reduction in refinancing interest rates, and an injection of credit into the economy for a program of technical modernization.

Indeed, from the middle of this year, the government obeyed the president and froze refinancing and curtailed lending. This prevented a sharp devaluation, but hasn’t saved it from a continuous one. Experts see no trends or perquisites for improvement: Lukashenko’s socio-economic model, disavowing the market and private property, has exhausted its resources. The major creditors, the IMF and Russia, demonstrate no willingness to substitute financial leverage, and the liberal reforms for bailout threaten to transform into a loss of control and power. Society is growing strained and restless with waiting.