System updated with slight liberalisation of the authorities’ monopoly on communication with the population

January 03, 2017 11:07

In 2016, amid oscillating popular ratings of the state and public institutions, the Belarusian society demonstrated high adaptability and reduced its requirements on the state. Social tension caused by the decline in the people's wellbeing and cutbacks in the state social guarantees, neither transformed into open protests and enhanced support for the opposition, nor boosted electoral activity. Spontaneous and localised protests by regional entrepreneurs were the only exception, but the authorities had successfully neutralised them by the spring, i.e. by the time the opposition normally woke up.

Some business organisations attempted to unite SMEs and channel the protests into a constructive stream without the street protests, which was the main negotiation requirement by the authorities. Entrepreneurs attempted to distance themselves from the opposition and did not politicise their demands, which, however, became stronger as the authorities refused to address them. Nevertheless, the Belarusian authorities managed to mute protests by making small concessions, relaxing power pressure, involving local administration in the negotiations with the protesters and delaying the conflict resolution.

In relations with the opposition and civil society, the authorities abandoned harsh repressions and focused on the financial pressure, legal restrictions and economic discrimination. Despite some political liberalisation, the Belarusian authorities pre-emptively expanded the legal framework for repressions in the case of social unrest and "hybrid" threats. In addition, new faces emerged in the protest movement from high-profile cases and prosecution of active citizens not connected with the titular opposition.

The government became more open to contacts with opposition representatives in order to improve its reputation internationally and divert protest sentiments. The Belarusian authorities somewhat increased the opportunities for the opposition to communicate with the population by allowing some limited access to the state TV and the print media.

During the parliamentary elections, the authorities increased the opportunities for the opposition to hold campaign events, but retained full control over the election process and the election results. The authorities made minor concessions to the opposition during the election race, (yet not at the legislative level) in order to create a favourable environment for the normalisation of relations with Western capitals.

Apparently, thanks to the joint pressure from Western capitals and the opposition with a constructive agenda, the Belarusian leadership granted two seats in the Parliament to the opposition.

Amid plans to reduce the state apparatus, anti-corruption pressure and unattainable economic growth plans, the nomenclature stepped up the competition for seats in the new parliament to "wait out" a crisis in a more comfortable "parliamentary" environment. The fact that the competition within the state apparatus became visible meant there was a certain imbalance in the public administration system.

In addition, the authorities milked some businessmen proxies, who built their wealth by being close to the authorities and public resources (eg Case of Yuri Chizh). Security officers were often used as a final argument in the struggle for the resource redistribution; they firmly anchored in Lukashenka’s environment, while large private businesses somewhat lost their influence and political representation in the Parliament.

The government attempted to limit pro-Russian activity in Belarus and allowed ‘soft belarusisation’. That said, the authorities adopted some opposition's popular slogans, symbols and ideas promoting independent Belarus.

Amid lingering socio-economic crisis, expectations of a steady decline in public institutions’ popular ratings prompted the authorities to take a final decision on ‘killing off’ independent sociology: the only independent sociological agency in Belarus, conducting regular polls on social, economic and political issues, IISEPS, ceased its activity entirely.

The All-Belarusian People's Assembly demonstrated that the authorities lacked new ideas and strategies for driving Belarus out of economic recession; that the Belarusian leadership was committed to the state monopoly in the economy and immutability of the political system, while gradually waving social responsibility.

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Economic growth in Belarus may be delayed until 2018
January 23, 2017 11:13
Image: Novy Chas

The Belarusian economy was shrinking for the second year in a row, in 2016, by 2.6%. Before 2015, the Belarusian economy was growing for 18 consecutive years. In order to stop the economic slump, Belarus needs a favourable international market situation and to settle all trade disputes with Russia. The Belarusian economy is unlikely to recover before 2018.

According to the preliminary reports, in 2016, Belarus had a 2.6% GDP decline. The Belarusian economy was shrinking for the second year in a row – a 3.8% decline in 2015. Most economic indicators in 2016, except in agriculture, had negative values. Wholesale trade had the most negative impact on GDP due to falling exports of potash fertilizers and petrochemicals, as well as construction, due to reduced investment in fixed assets by enterprises and decreased housing construction volumes.

In 1996-2011, the Belarusian economy was growing most rapidly, average GDP growth rate was 6.9% per year. In 2011, amid emission injections in the economy, disproportionate growth of wages against the background of low productivity and significant financial aid for loss-making agricultural, construction and industrial enterprises, the Belarusian rouble depreciated by three times. The absence of economic reforms and significant relative weight of state in the economy amid deteriorating external economic environment led to a sharp economic slowdown – circa 1% per year in 2012-2014; the slowdown was followed by the recession, caused by a slump in the prices for basic exports from Belarus and cuts in soft loans issued to maintain production volumes.

Belarus’ budget for 2017 is based on anticipated 0.2% growth. The expected decrease in the construction volume is circa 17% in 2017, which is unlikely to allow industrial growth with the renewal of fixed assets by legal entities. Even if wages grow, they will be offset by the 15% increase in utility tariffs by late 2017. Wholesale trade is largely dependent on the potash market situation and the oil processing volume at the Belarusian refineries. In view of the planned reduction in Russian oil supply in Q1 2017 to 4 million tons, wholesale growth is only possible provided the potash market situation improves. In late 2016, engineering output increased significantly, but amid the trade conflict with Russia, she may prioritise purchases from domestic manufacturers. In the given circumstances, Belarus’ GDP would only grow in 2017, provided the Russo-Belarusian dispute over energy supplies was fully resolved, Russia removed barriers for Belarusian exports and the potash market situation improved. That said, Belarus’ GDP in 2017 is likely to decrease by 0.5% - 1% and is likely to be followed by an attempt to overcome the recession in 2018.

The Belarusian economy has been in recession for two consecutive years. Amid anticipated decline in retail trade, construction and unresolved dispute over energy supplies from Russia, economic recession is likely to persist in 2017 and the economic recovery may be postponed until 2018.