Main results of 2012: Lukashenko did not maintain a high electoral rating, but strengthened his influence within the state apparatus

Review of Development in Politics, Business Life and Regions in Belarus in 2012

During the year, the most notable trends in Belarusian politics were the relative influence enhancement of the Administration of President and Alexander Lukashenko personally with the overall reduction of the government machine controllability and transition to “manual” management methods; an unsettled crisis in the relations with the EU and the U.S.
For the first time in the history of independent Belarus Alexander Lukashenko remained the president of the minority throughout the year. However, the popularity of the opposition has not increased. According to the sociologists, the majority of Belarusian society agrees neither with the government policy nor the proposals of the opposition. The preconditions for accumulation of the discontented majority’s interests have been created but for now, no political force has taken advantage of the existing opportunities.
In 2012 the economic development was significantly different from other periods in the history of Belarus. The main features of 2012 included a trade surplus throughout the year, Gold and Forex Reserve growth against substantial external and internal debt payments, unusually low rates of GDP, a rapid household income growth compared to the level prior to depreciation of the currency.
In 2012, the government managed to normalize social strain in the regions. Compared to 2011, outbursts of mass social unrest were local and short-term last year. In the meantime, at year-end 2012 some regions did not comply with the forecast for GDP growth. Generally, the economic situation in the regions remains rather unstable.

In the new year of 2013 the key challenges for the governing group will include decrease of the state controllability, decline in living standards and securing electoral support in the presidential elections of 2015. The development of the situation demonstrates that President Lukashenko will have to resort to extreme management methods for the retention of power.
Despite the challenging economic situation, major changes in the economic policy are very unlikely. It is highly improbable that the government’s plans for GDP growth are going to be fulfilled and the progress made in 2012 is going to be achieved in 2013.
The government will try to fall back on the methods that have already proved to be successful, such as loans to cover the gap in the balance of payments (in Russia, in some of the Asian markets and attempts to negotiate with the IMF). If an agreement with the IMF is not achieved, the tight monetary policy is likely to be refused and emission pumping of the economy is possible with respective consequences in the form of the national currency exchange rate weakness in excess of that set by the state budget.
The privatization will remain “spot” privatization and will be accompanied by the same “spot” nationalization of enterprises.
The rate of salary growth will remain low. Household expenditures on housing services and utilities, transport and communications will grow faster than population incomes.

Political Situation

During the year, the most notable trends in Belarusian politics were the relative influence enhancement of the Administration of President and Alexander Lukashenko personally against decrease in his electoral rating; a weakening ability to influence the situation of other internal political players; a transition to “manual” management methods; an unsettled crisis in the relations with the EU and the U.S. The key challenges for the governing group in the coming years will include decrease of the state controllability, decline in living standards and securing electoral support in the presidential elections of 2015. The development of the situation shows that President Lukashenko will have to more often resort to extreme management methods for the retention of power.

Enhancing the Role of the President: Causes and Consequences

The year gone proved President Lukashenko remained the most influential figure in Belarus. A number of regulations adopted in the sphere of property relations significantly enhance the influence of the Presidential Administration, which decided to reconsider previously settled deals with the state property. The case of partial nationalization at “Kommunarka” and “Spartacus” enterprises in October means that any privatized enterprise may basically go back under the state control either by means of additional issue of shares, or through the introduction of a state representative to the Supervisory Board. Due to the restricted alternatives to manage economic processes and from propagandist considerations such actions are possible in 2013, as well.

At the same time the electoral rating of Lukashenko does not respond any more to the mobilization measures taken by the government, such as salary increase and strident rhetoric of the President addressed to his subordinates. Independent surveys show that Lukashenko’s electoral rating is set at 30%.

For the first time in the history of independent Belarus Alexander Lukashenko remained the president of the minority throughout the year. However, the popularity of the opposition has not increased. According to the sociologists, the majority of the Belarusian society agrees neither with the government policy nor the proposals of the opposition. The preconditions for accumulation of the discontented majority’s interests have been created but for now, no political force has taken advantage of the existing opportunities.

More frequent use of “manual” management methods – such as decrees and orders of the President or urgent Lukashenko’s visits to enterprises – has been a forced answer of the governing group to the overall decrease in the state governability. The latter became apparent, for example, in the failure of the budget modernization program of the woodworking industry. Another good example is unstopped illegal flight of a single –engine plane from Lithuania to Minsk and back, which revealed dangerous vulnerability of the entire system of national security. In both cases, the President’s reaction was the same: he discovered and dismissed the guilty, and/or issued a corresponding decree without eliminating the causes of the problem.

The emergence of various “state” rumors and information leaks such as issuance of 650,000 working visas to Chinese citizens, on the dispensation Lukashenko rebuke to Prime Minister Myasnikovich, the emergence of the territory of Belarus Russian air base, about the transplant Lukashenko to “Maybach”and so on. The appearance of such rumors is an inevitable opposite effect of ironfisted methods of “manual” presidential governance. Finally, the government’s intentions, presented by Vice Prime Minister Tozik, to strengthen the fight against parasitism and dependency or introduce compulsory declaration of income for all citizens, indicate the inability of the state to fulfill its social obligations to the former extent. If implemented, these measures will have an inverted effect in the form of general decrease in the living standards of citizens due to narrowing the sector of informal employment and reduction of informal income.

The political elite in the shade of President Lukashenko

Throughout the year, the governing elite in Belarus showed two significant trends reducing quite unlikely probability of the power succession scenario. Firstly, the influence of Prime Minister Myasnikovich has significantly reduced, which results in consequent weakening of his team with the knowledge of the President. During the year, two Deputy Prime Ministers close to Myasnikovich were removed from the government to other posts: V. Ivanov and S. Rumas. In addition, President Lukashenko has put freeze implementation of the privatization plan in cooperation with the EurAsEC Anti-Crisis Fund, sponsored by Myasnikovich. Secondly, an important outcome of the year is dispelling of a popular myth about Viktor Lukashenko as a likely successor to his father as the head of the state. Notorious dismissals of some of the executive officers at the State Border Committee, and especially at KGB (in connection with the suicide of an officer) have significantly weakened the demonical image of Viktor Lukashenko as a shadow supervisor of the Belarusian security services and have shown that the eldest son of the President, at best, can lobby for appointment of executive officers at certain law enforcement agencies, but does not control their work.

The most important result of the internal policy is putting freeze the issue of transition from the current majoritarian electoral system to a mixed or proportional one. Lukashenko’s refusal to implement electoral reform has blocked the political development of the largest and most influential in Belarus non-governmental organization “Belaya Rus”, which may adversely affect future campaigns. In particular, the parliamentary elections have discovered fundamental divergence of interests of the presidential administration and elite of functionaries presented at “BR”. When Lukashenko is interested to ensure high voting turnout and preserve the majority voted system, the elite of functionaries at “BR” is interested in the opposite. Low voting turnout at the last elections means that “BR” has not sufficiently engaged their on the spot mobilization resource, and this can be regarded as an “Italian strike”. President Lukashenko will have one way or another to solve the problem of blocking the political future of “BR”. For example, to allow establishment of a parliamentary group at the parliament, where “BR” will be in majority*, or vice versa – to stop the development of this organization, which already has more than 130 thousand members. Otherwise, the problem of low voting turnout might happen again at the presidential election in 2015. The independent research measurements suggest that it is the problem of voting turnout, and, in particular, the electoral support of the President, that will be the main challenge for the governing group in 2015.

Centrifugal tendencies have formed among Belarusian opposition that became apparent as far back as during the “parade of candidates” at the presidential election in 2010. Last year, various opposition forces have failed to agree on a common action plan and implemented 4 independent tactics of participation at the parliamentary elections. The scale of mutual distrust of the opposition forces is proved by the fact that three of these tactics were different forms of boycott, but their creators, nevertheless, acted separately. If centrifugal tendencies and distrust are preserved, the likelihood of the project “One candidate” at the presidential election in 2015 will be reduced to values close to zero. The chances to create a unique coalition by 2015 are reduced also due to the rift in the political emigration, where 2 centers are being formed around BNR Rada and Charter’97 and/or ex-presidential candidate A. Sannikov, who was granted a political asylum in London.

Foreign Policy: coasting towards the Kremlin

The main result of the year in the foreign policy of President Lukashenko is preservation of the status of the sole mediator between the Belarusian political establishment and Russian elites both at the Kremlin and constituent entities of the Federation. This intermediary status guarantees him immunity in Belarus – at least for as long as he can provide a resource support to Belarusian economy from Russia, be it favorable prices for energy resources or credit support.

After the presidential election in 2010, the foreign policy of Belarus has not changed and is characterized by freezing of the Western direction with a gentle participation of Belarus in the process of Eurasian integration. Consequently, Lukashenko is increasingly isolated in the political framework of the new Eurasian Economic Union. The range of Lukashenko’s summit meetings in 2012 is limited to the leaders of Russia, Turkmenistan, Kazakhstan, Azerbaijan and Ukraine. We should also highlight Lukashenko’s visit to Latin America in June, including Venezuela, Ecuador and Cuba. The geography of trips abroad is also narrowed: in 2011 Lukashenko held nine visiting summit meetings, in 2012 – 8, and 4 out of the 8 meetings were held in Russia, 3 – in the “Latin American” tour, and one – in Ashgabat. Also, there is a trend of “domestication” of President Lukashenko. In 2012, he had 19 contacts at the summit level with the presidents of other countries, 11 of which took place in the capital of Belarus, and 6 of them were telephone calls, 3 of which – with Russian President Putin. To compensate for this trend in autumn and early winter, the President had to make a greater use of media tools, such as interviews the western mass media, meetings with Russian journalists and editors-in-chief of the CIS mass media.

Throughout the year, the President demonstrated a consistent and tough approach to the conflict with the West. In February-April, the authorities attempted to impose on the EU and the U.S. their own – in stages – scenario to fulfill the conditions set for Belarus, the main of which is the release and rehabilitation of all political prisoners. President Lukashenko announced his intention to conduct a political modernization and freed the former candidate A. Sannikov and his authorized representative D. Bondarenko. The authorities expected the West to give a similar response and start a gradual withdrawal of the sanctions. As this did not happen, Minsk just took “cosmetic” measures, such as the change MFA executive officers (S. Martynov to V. Mackey) and conducted the parliamentary campaign without any political repression. Thus, one may claim that the significant increase in international activity of the official Minsk after the appointment of Foreign Minister Mackey is due primarily to the initiative of Mackey himself. The key to resolve the political conflict with the EU and the U.S. is in the hands of President Lukashenko, and this greatly limits the MFA opportunities as an intermediary in negotiations with external partners of the Republic of Belarus.

Some of the authorities’ actions at the end of the year gave some grounds for believing that the governing group activated unofficial negotiations with the IMF on a new round of financial support. In particular, on December 14, the National Bank hastily stopped servicing client accounts of the law enforcement agencies (which had not been reported in advance), and on December 19, in Moscow, President Lukashenko requested the administration of the Russian Federation for a “low-cost” loan of USD 2 billion allegedly aimed for modernization of Belarusian enterprises. However, Lukashenko conscientiously does not conform to the main condition for the resumption of political relations with the West, i.e. does not release the remaining political prisoners.

* It is reported that on December 20 there was a parliamentary group “Initiative” established at the House of Representatives. The group is under the supervision of the delegate from Stolbtsy parliamentary division, N. Ivanchenko (the Presidential Advisor – Chief Inspector for Minsk Region). It is most likely that this group will play the role of the center of policy initiatives in the parliament controlled by the President.