Bitter Results of Belarusian ‘Authoritarian Modernization’

Last year, total foreign debt of Belarus increased by USD 6,452 mln or 29,2%. By January, 1, it amounted to 28,512 mln, or 52,2% of the national BIP. According to the BELAPAN news agency now foreign indebtedness per person equals to USD 3007, although at the beginning of 2009 it was just USD 1596.

According to IMF, Belarusian foreign debt will keep increasing. Thus, at the end of 2011 it can reach 57,3% of BIP, 2012 – 61,9%, and by 2016 it can amount to 74,5% of BIP. Will the government find the courage and resources to change the course which led the nation into debt? Odd enough, the Belarusian government today pays attention to IMF’s opinion and it recently decided to correct loans interest rates according to the IMF recommendations. But, of course, the most important recommendation is to privatize state-owned firms. And it is the question of fundamental overhaul of entire Belarusian society and its values, while at the same time, nowadays only privatization manipulated by regime insiders is possible.

The problem with indebtedness is not the sum as such. After all, many developed countries have much bigger debts. Yet their economy is working and they can repay them in reasonable time span. Is it the case for Belarus?

The rising negative balance in Belarusian foreign trade is a reason to doubt it. There are also other reasons to question economic health of the nation. Thus, under Lukashenka and actually after independence, no new major production branch or even enterprise or fabric has been built in the country.

Almost all major foreign investment projects underway are some low-technology production (like sewing), mining and construction materials production (like concrete production projects) or “dirty” production (dangerous chemicals production). Meanwhile, such propagated projects as a car plant seems to be limited just to some assembly lines only, working with all imported parts. But even this car plant changed already some investors and last month the Belarusian government declared its intent to renounce the cooperation with Iran Khodro and give the plant to some Chinese. The Iranian project ended in assembling only some hundreds machines.

There were, however, successful modernization undertakings like those at both oil refining facilities in Mazyr and Navapolack, yet it remained isolated and limited just to few examples. Some pro-regime analysts since years articulate the idea of ‘authoritarian modernization’ under Lukashenka, yet there are not enough examples of modernizing anything to consider regime’s economic policy being ‘modernization’ whatsoever, though it was really undoubtedly ‘authoritarian’.

Cheap Russian oil traded for Belarusian geopolitical loyalty to Moscow allowed Lukashenka to downplay the necessity for reforms. But now, with new Russian policy toward Belarus and its denying Minsk its old business of taking crude Russian oil with further selling it in Western Europe, the Belarusian government had no other way than to borrow. After all, the oil products, potash and some chemicals provide a bulk of Belarusian exports.

The need to borrow was no small one, so in two years foreign debt almost doubled. That is another reason for Belarusians to be seriously concerned with their economy. And not just economy but also the future of the welfare state and real independence of the country, especially of Russia.

No matter, whether current Belarusian regime ultimately is going to get more nationalistic in its discourse or symbols. No matter, whether Lukashenka will finally speak Belarusian, as some Nationalists predict. Actual results of this Belarusian government are already clear – increasing vulnerability of the nation and more than dozen years wasted for modernization – whether authoritarian or not.



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