Belarus and Europe inch closer

By Gabriel Gatehouse

BBC News, Minsk

The European Union has taken its first big step towards bringing Belarus back in from the cold, inviting it to become part of its "Eastern partnership".

But old habits die hard in Belarus - a country that has been dubbed the "last dictatorship in Europe".

At a recent small-scale anti-government demonstration, around 30 people gathered outside one of the prisons in the capital to demand the release of three prisoners. They believe they are behind bars for their political activities.

Within minutes the police arrived - special forces in camouflage uniforms spilling out of a large green truck.

When the protestors refused to move on, the police used force, driving the crowd through the streets of Minsk, punching and kicking them from behind.

In years gone by, perhaps, the demonstrators would have been arrested as well. This time they were not. Progress, of sorts.

The three prisoners are all entrepreneurs - small traders who say that repressive economic laws are driving them out of business.

'Closed for business'

The markets of Minsk have become a breeding ground for opposition to President Alexander Lukashenko's rule.

Alexander Makaev runs a small stall selling bathroom fittings at a market on the outskirts of the city. In amongst the taps and shower heads, you can see opposition leaflets peeping through.

Mr Makaev says that a new law, which came into force in 2007, makes it virtually impossible for small businessmen like him to operate. He cannot hire staff without paying punishing taxes.

He says that the tax system is so designed, that 90% of entrepreneurs end up having to break the law or go out of business.

"Belarus is closed for business," he says. "Everything is designed according to a vertical power structure. The biggest businessman in this country is Mr Lukashenko himself, and you need to know how to cut a deal with him."

But the Stotz Farm tells a different story. Around 20km outside Minsk, this former collective farm is now owned by a German company. There are 800 head of cattle, 5000ha (12,000 acres) of arable land.

But most of the company's profits come not from producing milk or wheat, but from selling state of the art German farm equipment - tractors and combine harvesters - on the Belarussian market.

Andrei Haibullin, the company's director, says that the Belarussian authorities are making a real effort to improve the climate for foreign investors.

"In the past six months, the demands made on our company by the government and other regulatory bodies have significantly decreased," he said.

"More and more often, we find the government coming to us and offering their help."

At the end of April, Alexander Lukashenko visited Rome. He was received in the Vatican by the Pope himself. It was his first official trip to the European Union since 1995, after Brussels suspended its travel ban and other sanctions.

But Sergei Martynov, the Belarussian foreign minister denies that the changes under way in his country are in any way the result of European pressure.

"Belarus is changing and Belarus is a changing society," he said. "But Belarus is undergoing all these changes not to please the European Union or anyone else.

"We are doing what we do because of the requirements of our own society."

The vast bulk of the Belarussian economy is still controlled by the state.

During the 1990s, as other former Soviet States like Russia and Ukraine underwent the "shock therapy" of rapid and large scale privatisation, Belarus remained almost entirely closed.

'Time capsule'

But now, says Mr Martynov, Belarus is ready for change.

"Now we are a much more confident economy, and we are opening up. We are not going to do it in a garage sale manner," he says.

"We are going to negotiate tough on each and every asset, and we are going to do only those kinds of sales which will be profitable."

As Minsk and Brussels move closer together, relations with the Kremlin have soured.

Large-scale Russian subsidies are beginning to dry up, and Alexander Lukashenko has been forced to look for other sources of income.

The Belarussian opposition believes, however, that the current reforms are cosmetic.

Andrei Sannikov, a former deputy foreign minister, says that the EU is being hasty in rehabilitating Mr Lukashenko.

"He badly needs money," he says.

"He needs investment. He knows that Russia is not providing the amounts that it used to provide to him, so he doesn't want to change anything here, but he does want to use this new policy of the European Union to improve his own financial situation, to strengthen his regime."

But if Brussels wants to pull Belarus out of Moscow's orbit, it will take more than economic investment. In military terms, Russia and Belarus remain close.

In February the two countries signed a joint air defence pact, raising the possibility of Russian missile systems being deployed on Belarussian soil.

In many ways, Belarus feels like a time capsule, a place where International Labour Day still draws crowds; where old Soviet habits are proving very resistant to change.

Some of those habits will become obstacles on the path towards democracy and European integration.



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