Belarusians Debate Their Development Path

The Fifth All-Belarusian People’s Assembly (ABPA) opened in Minsk, on June 22. The two-day gathering brought together 2,500 delegates representing managers from all levels of power along with publicly acclaimed “rank-and-file” workers, scientists, students, and so on (Belta.by, June 22). It is debatable why there is a need in Belarus for that sort of extra-constitutional body to glorify the government’s achievements, legitimize its shortcomings and set plans for the future. It may well be that in countries where a parliamentary system did not develop organically—but rather in imitation of Western structures—the legislative branch is not perceived as the supreme popular arbiter and endorser of the dominant political will; rather, an archaic form of resolving this problem is called for to serve this purpose. In medieval Slavic principalities, such a form was the Veche, a ritual of direct democracy and a gathering at which communal leaders were expected to give their approval to the actions of the monarch.

It is not by accident that in modern Belarus, the first such quasi-veche took place in October 1996, on the eve of a constitutional crisis when the legislature and the executive branch were at loggerheads. Among other things, the First ABPA approved the changes in the constitution that were to greatly expand the powers of the president. These changes were subsequently enacted, despite the will of the then-intransigent parliament.

During the run-up to the Fifth ABPA, the debates about reforming the shrinking Belarusian economy intensified (see EDM, June 22). They were sparked by an article written by Sergei, Tkachev, a former economic advisor to President Alyaksandr Lukashenka. In it, Tkachev warned against preaching macroeconomic stability while sparing credit policy. In his opinion, such an approach would eliminate Belarusian industry and boost financial speculation. Tkachev is in favor of differentiating corporate tax and interest rates to stimulate specific enterprises and industrial sectors. He believes that credit expansion—i.e., an increase of the money supply in the economy—would not fuel inflation if thorough control is exercised over targeted spending of industrial loans (Belarus Segodnya, May 31).

Tkachev’s opponents, Natalya Mironchik and Sergei Gritsuk—two of the authors of the “Program of Socioeconomic Development of Belarus in 2016–2020,” prepared for the Fifth ABPA—claim that current asset deficits in Belarusian industrial sectors have reached a critical threshold and that the enterprises are having a hard time servicing their pre-existing loans. In their view, the critical problem of the Belarusian economy is its low efficiency. If this is the case, credit expansion will only make it worse, boosting inflation, which is already at 12–13 percent per year (in that regard, Belarus is 175^th among 188 world countries). Moreover, in the Eurozone, the growth in bank credit during 2010–2015 amounted to 0.9 percent and in the United States to 2.1 percent; in Belarus, the respective indicator is 37.1 percent. No assurances exist that “thorough control” over loans will result in the optimal distribution of credit. Also, easy loans will make the already over-credited enterprises even less competitive. If the enterprise is grossly inefficient, it cannot be helped by easy money. Only true drivers of the economy deserve credit resources, Mironchik and Gritsuk posit (Belarus Segodnya, June 15).

Previously, articles reflective of Mironchik and Gritsuk’s arguments were only published by the opposition media. But now, the debate is in full swing in the major government daily Belarus Segodnya, and liberal economists are given almost as much space as the champions of a dirigiste economy. To be sure, the opinions of the latter still dominate the government media, but not as overwhelmingly as before. According to some critics of the aforementioned 2016–2020 Program, the document sells out to the International Monetary Fund (IMF) in order to encourage this global financial body to restart its loan program for Belarus. A related condemnation is that Mironchik and Gritsuk’s arguments blindly echo tenets of the failed Washington Consensus—that is, the major set of neoliberal prescriptions allegedly discredited during the recent international financial crisis (IMHOclub, June 21).

The mission of the IMF, indeed, began its work in Minsk on June 21. And its head, Peter Dolman, has just issued one more appeal to the Belarusian government to accelerate and deepen “structural reforms.” For his part, Deputy Finance Minister Maxim Yermolovich told Reuters that Belarus has fulfilled all the preliminary conditions set by the IMF to receive a new loan (Tut.by, June 20).

Following President Lukashenka’s June 22 speech at the Fifth ABPA, one of the commentators of Radio Liberty, Yuriy Drakakhrust, noted that, in the past, the Belarusian head of state has tried his best to eclectically borrow from both statist and liberal models and to sugarcoat the negative social effects of the latter. Yet, Drakakhrust pointed out that in the speech before the ABPA, Lukashenka nevertheless underscored the necessity of financial stabilization and that inflation should not exceed 5 percent. This, along with increasing utility bills, are positions more reformist than ever taken by Lukashenka in the past (Svaboda.org, June 22). They spell problems for large state-run machine-building enterprises, whose fate is the most painful issue facing the Belarusian economy.

Along with inching toward liberal economic reform, Belarus has gradually progressed toward a keen realization of its national interests. Moreover, Belarus is increasingly developing an understanding of its cultural essence as pointedly detached from Russia’s. These trends are taking multiple forms. For example, Arseny Sivitsky, the director of the government-friendly Center for Strategic and Foreign Policy Research, opined that the North Atlantic Treaty Organization’s (NATO) exercise Anakonda 2016 as well as the upcoming Alliance summit in Warsaw (July 8–9) are reactions to Russian actions. In addition, Sivitsky, writes, these NATO activities bear a symbolic character and cannot threaten Belarus (Nashe Mnenie, June 10). In his turn, Alexander Shpakovsky, a political commentator for Sputnik.by, observes that the glorification of the White Guard and other anti-Soviet personalities is in full swing in Russia (a memorial shield to Carl Gustaf Mannerheim in Saint Petersburg and the idea to erect a monument to Baron Pyotr Wrangel in Crimea are cases in point). Whereas Belarus, Shpakovsky says, continues to emphasize its Soviet roots as an immunization to extreme forms of nationalism (Facebook.com, June 21).

Being more inherently Soviet than Russia itself may come across to some as a paradoxical way of claiming a separate-from-Russia identity. But Belarus is awash in paradoxes, strongly encouraging the need for a closer look at this East European country.