Repercussions of the Internet Shutdown on the Belarusian IT Sector

Internet connectivity in Belarus saw significant disruption following the country’s presidential election on Sunday, August 9. The shutdown is widely believed to be a state-sanctioned effort to reduce the effectiveness of protests following the disputed vote, in which Alyaksandr Lukashenka sought a sixth term in office. The internet outage was not limited to Minsk but also affected much of the rest of Belarus, notably other major cities such as Hrodna, Brest, Homel, Mahilyow and Vitebsk. Lukashenka quickly claimed that the internet had been disrupted “from abroad” in order to ferment discontent inside the country, with state media reporting that websites of government agencies were specifically targeted (BelTA, August 10 [1] [2]). Despite the state’s claims, Belarusian IT specialists believe the shutdown was, in fact, state-orchestrated, and experts have explained the complexity, difficulty and unlikelihood of conducting a nation-wide internet blackout from abroad (Meduza, August 12). While the aim of the stoppage was, indeed, likely to reduce the ability of protestors to coordinate and reduce the spread of news of discontent, the repercussions are already being felt by the country’s previously flourishing IT sector (see EDM, March 18, 2015 and March15, 2018).

Internet access largely returned on August 12, after a three-day outage—costing the economy some $170 million, according to the international non-governmental organization (NGO) NetBlocks. To put this in perspective, the country’s GDP per day is approximately $160 million (Netblocks.org, Dev.by, August 12).

Aside from the huge costs to the overall economy, there is likely to be a lasting detrimental impact on the Belarusian IT sector. Information technology is one of Belarus’s most promising economic areas, with the country having been labeled an emerging Silicon Valley of Eastern Europe (Wall Street Journal, December 6, 2016). Big names in the software development space, EPAM and Wargaming, were founded by Belarusians, and the well-known company Viber was built up in Belarus. In 2018, IT accounted for 5.7 percent of Belarus’s GDP, a share predicted to increase to 10 percent by 2022 (Software-development-cee-report.com, 2018, accessed August 13, 2020). In 2019, the country was ranked sixth worldwide in mobile app creation. Drivers of Belarus’ success include a strong STEM education system, little government regulation, low wage costs, and a time zone from which companies can easily work with Europe, Asia and the United States.

The low level of state control in the Belarusian IT sector distinguishes it from other domestic industries. Companies registered in the Belarusian Hi-Tech Park enjoy little regulation, specifically low tax rates and the ability to hire foreign workers without visas. In November 2019, Arthur Pratapopau, the head of Global PR at Wargaming, stressed that the government’s approach, particularly low interference and regulation, had been conducive to its growth and was pushing the sector forward. But since August 10, 2020, IT workers in Belarus have grown increasingly pessimistic about the future of the sphere; one software developer explained that due to the internet blackout, outsourcing contracts are now being broken. Outsourcing makes up around 60 percent of the Belarusian IT industry, with over 90 percent of customers coming from the US and the European Union. Some companies have been unwilling to disclose the political instability behind the blackout to foreign customers in case they lose clients altogether. In Belarus, over 90 percent of software produced by the Hi-Tech Park is exported. IT workers have been sent to neighboring countries from multiple Belarusian IT companies to be able to work effectively during the shutdown (Author’s interviews, November 14, 2019 and August 12, 2020).

On August 12, over 1,500 individuals (as of this writing) from the Belarusian IT sector signed onto an open letter stating that “startups are not born in an atmosphere of fear and violence.” IT leaders effectively threatened to take their business out of Belarus given the rise of conditions “in which a tech business cannot function” (Dev.by, August 12).

In Belarus, the immediate impact of the internet blackout is being temporarily addressed by tech-savvy residents who are providing VPNs to provide access. The long-term impact on the IT sphere is harder to remedy, with Belarus’ reputation as a burgeoning tech hub likely already eroded. To stem this downward trend, the government will need to take immediate action to reassure domestic employees and international customers alike.