News / Europe

Belarus Goes Bankrupt Without Any Savior in Sight

Belarus' President Alexander Lukashenko speaks at Victory Square in Minsk to celebrate the 66th anniversary of the World War II victory over Nazi Germany, May 9, 2011
Belarus' President Alexander Lukashenko speaks at Victory Square in Minsk to celebrate the 66th anniversary of the World War II victory over Nazi Germany, May 9, 2011
James Brooke

Belarus is emerging as the Greece of the Slavic world. Flirting with bankruptcy, Belarus has seen the value of its ruble plummet - from 3,000 to the dollar a few weeks ago to 6,500 today.

But in a big difference with Greece, no one - not the West, not Russia, not the International Monetary Fund - is running to help. Neighboring leaders cite the eccentric and often harsh leadership of the country's president of 17 years, Alexander Lukashenko.

In a typical move, Lukashenko told his Cabinet on Tuesday that Russia is preparing to loan Belarus $6 billion.

Within one hour, Russia’s Interfax news agency ran a story citing Kremlin sources saying that Russia is not going to loan any money to Belarus. In reality, these sources say, Russian Prime Minister Vladimir Putin will visit Minsk on Thursday and offer to pay $1 billion to win total control of Belarus’ gas pipeline system.

Jana Kobzova is Belarus analyst for the European Council on Foreign Relations. On a visit to Moscow this week, she finds Russians highly wary of Belarus.

“Everybody is fed up with Belarus," said Kobzova. "They just think they have been sucking up resources far too long.”

Putin estimates that Russia has been subsidizing Belarus to the tune of $5 billion a year. Last year, that was 10 percent of the gross domestic product [GDP] of this Central European nation of 9 million people.

By turning off subsidies this year, Moscow is pushing Minsk into the kind of traumatic shift from a state economy that Russia went through after the collapse of communism.  

Anton Struchenevsky, economist for Russian investment house Troika Dialog, sees clear similarities.

"What is happening currently in Belarus is very close to the process which was observed in Russia before the collapse of the Soviet Union in 1991," said Struchenevsky. "The economy is at the beginning of very dramatic changes.”

Imported goods are disappearing from store shelves. Shortages of imported parts are stopping assembly lines, forcing factories to lay off hundreds of thousands of workers. And thousands of Belarussians stand in lines outside exchange kiosks trying to unload their local rubles before they become even more worthless.

Struchenevsky calculates that, in nominal terms, Belarus incomes are going to drop by half this year, hitting $3,000 a year - the level of Ukraine.

“GDP in nominal terms should shrink by two times,” he said.

With the economy collapsing, the rating agency Standard and Poors last week placed Belarus on the same level of creditworthiness as Greece.

In a big difference, though, European Union finance ministers recently agreed to a $147-billion bailout for Greece, a democracy with a population only slightly larger than Belarus.

But Lukashenko can expect little from the West. He is one of the few leaders in the world today to openly mock democracy.

In recent days, Belarus prosecutors have put on trial five former presidential candidates. On Saturday, a Minsk judge imposed a five-year sentence on Andrei Sannikov, the leading opposition candidate in last December’s presidential elections. A sixth candidate escaped to the Czech Republic, where he charged that he was tortured in jail in Minsk.

So far 30 dissidents have been tried and convicted this year, with 22 receiving jail terms. Last week, the United States blasted the trials, calling for the release of all political prisoners.

EU foreign ministers also have condemned the trials.

Symptomatic of the hardening of attitudes is the reaction of Guido Westerwelle, foreign minister of Germany. Last fall, Westerwelle met with Lukashenko in Minsk and offered billions of dollars in financial aid, if Belarus held free and fair elections.

On Monday, the German foreign minister condemned the trial and conviction of Sannikov, saying, "In this trial, justice has not been served.  It is the political will of Lukashenko that was executed."

He demanded the freedom of all of Belarus’ political prisoners.

Next week, EU foreign ministers are to meet to debate tightening sanctions against leaders of the repression in Belarus.

Even without sanctions, the markets already are isolating Belarus.

On Monday, Jan Kulczyk, a Polish billionaire, suspended a plan to build a $2-billion coal-fired power plant in Belarus. He said he could not do the project without bank financing, but no bank would offer money for a major project in Belarus today.

You May Like

Could Nemtsov Threaten Putin in Death as in Life?

Dynamic and debonair opposition leader had supported liberal economic reforms, criticized Russian president's aggression in Ukraine More

Oil Smuggling Highlights Challenges in Shutting Down IS Finances

Pentagon spokesman says Islamic State 'certainly continues to get revenue from the oil industry black market' but that airstrikes have made a dent More

India Focuses on Infrastructure, Investment to Propel Economy

Government expects economy to grow at 8 to 8.5 percent in next fiscal year More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More