Publication: Eurasia Daily Monitor Volume: 1 Issue: 132

Belarusian president Alexander Lukashenka has ordered drastic measures in support of the “Belarusian path” of development. These, in turn, are accompanied by official depictions of remarkable economic growth and demands for an end to “foreign” intrusion in domestic life, including hostile actions against Belarus, adoption of Belarusian children, or liquidation of free-economic zones.

During Lukashenka’s second term, there has been a contrast between observer’s accounts of a Soviet-style economy in the Central European republic and official statistics, which show a recovery and significant growth; figures that were used to support the president’s request to run for a third term in office in 2006. In October 2004, for example, GDP rose 11.1% and industrial production 16.1% over the same period last year. Inflation for the month was 1.2%. According to the Chairman of the Belarusian Union of Entrepreneurs, Alexander Potupa, the results are tightly linked to the growth in Belarusian products exported to Russia and the rise in world oil prices that has permitted a “flow of oil dollars” into Belarus. In short, the situation cannot be considered permanent, and Potupa added that the Belarusian government thus far had failed to exploit it to introduce economic reforms (Narodnaya volya, November 16).

Inflation, for some years the weakest link of the Belarusian economy, appears to be under control. In 2004, according to First Deputy Prime Minister Uladzimir Semashka, it is unlikely to exceed 12%, and the plan for 2005 is to limit inflation to 8-9%. The consumer price index has risen 10.2% between January and October 2004, a dramatic drop from the reported 20.6% in the same period in 2003. IMF projections for the consumer price index for 2004 are somewhat higher at 19.5% (Interfax, November 18).

The economic situation has also been stabilized as a result of a pending agreement between the Belarusian authorities and Russia’s Gazprom, the sole supplier of gas to Belarus. Gazprom chairman Alexei Miller has reported that in 2005, Belarus is expected to receive 18.6 billion cubic meters of gas, whereas the Belarusian side has requested 20.5 bcm (Belorusskiy rynok, November 15). The two sides, however, have not come to terms on a price for the gas: Russia has demanded a payment of $46.67 per 1,000 cubic meters (including taxes), whereas Belarus wishes to keep the price under $37 (Interfax, November 18).

The reluctance of the Lukashenka administration to introduce Western-style economic reforms and privatization is illustrative of the mindset of the Belarusian leadership. A brief experiment to create free-economic zones already appears close to abandonment because these zones have failed to resolve “serious state problems” and have been unable to attract foreign investment and currency (Belorusskiy rynok, November 15). The government continues to delve into economic affairs, preventing state-owned companies from competing with those in the private sector, and controlling the supply of resources in order to boost the GDP. The government manipulates the tax structure so that favored companies are relieved of some non-monetary obligations (Belorusskaya gazeta, November 8).

The head of the International Financial Corporation in Belarus, Ivan Ivanou, presenting the results of a survey called “The Business Environment in Belarus,” noted the weak position of the private sector in Belarus, which makes up only 8% of GDP. Small businesses in particular pay a disproportionate quantity of taxes and the number of individual entrepreneurs has declined substantially over the past decade (Interfax, November 18).

An innate fear and distaste for foreign involvement in the country manifested itself in several presidential statements on Belarusian children over the past week. The government wishes to control their visits abroad, whether for medical reasons or general recuperation, or whether these are orphans adopted by foreign families. Lukashenka’s outburst relates to the international perception of his country as poor and backward and to the demographic dilemma of a declining population, now below 10 million.

In a speech to parliament on November 17, the president declared, “The process of taking kids abroad must be reduced to zero. The kids are ours to raise and educate” (Interfax, November 17). Perhaps his real concerns were illustrated by a further comment that children return from abroad “doubly infused with consumerism” and were exposed in the West “to the wrong influences” (Reuters, November 17).

The travel of children abroad, medical aspects aside, is one of the few facets of public life to escape the control of the pervasive Lukashenka government. A commission under Minister of Education Alexander Radkau is examining the situation. The president lambasted 4,200 negligent parents that allowed their children to become orphans in 2003.

Lukashenka also demanded an end to the travel abroad of Belarusian women for modeling, noting that the state could provide jobs for “beautiful girls” (Interfax, November 17). Evidently he is incensed at the appearance of French models on billboards along his route to work, as well as advertisements for foreign watches, and would prefer that Belarusian girls be featured instead (AFP, November 19).

The goal is to limit further the links between the country and the “West,” and solidify what the president likes to call “the Belarusian path” to progress.