Revolution, Reform, or Reversal? Scenarios for Belarus in the 2010s

Vitali SilitskiResearch Director,

Belarusian Institute for Strategic StudiesBrussels, 24 November 2010

Approval ratings of presidential candidates one month before the vote,

2001, 2006, and 2010 elections

58.6

44.2

16.5

6.4 7.73

44.4

57.9

48.2

13.721.1

12.8 16.88.6

0

10

20

30

40

50

60

70

Lukashenka,2001

Lukashenka,February

2006

Lukashenka,November

2010

Goncharik,2001

Milinkevich,February

2006

Kazulin,February

2006

Neklyaev,November

2010

Sannikov,November

2010

Open Closed

Source: International Institute for Socio-Economic and Political Studies (www.iiseps.org)

Support for Lukashenka among selected socioeconomic groups, 1997 and 2010

32.9

46.7

21.6 17.5

69.977.9

24.735 33.3 32.1

50

74.2

0

10

20

30

40

50

60

70

80

90

Students Workers "Elites" Minskers Villagers Pensioners

1997 2010

2001 2010

Support market economy 54,0 58.8

Support planned economy 24,1 14.1

Support separation of powers

41,143.5

Support strong presidency 34,0 29.6

Favor integration with EU 37,5 39.1

Favor integration with Russia

44,724.1

Support current course 32,6 38.2

Support change 49,0 43.2

Would vote for Lukashenka 36.0 39.3

Expectations what a new President should do

Foreign debt of Belarus, $bn

05

10152025

2006 2007 2008 2009 2010

Foreign debt of Belarus, $bn

Belarusian economic model is built in the way that only the state can go bankrupt – once and for all. This eases the pain of adjustment on the society but makes reform extremely difficult in the longer run

Lukashenka’s transformation, 2007-2010

• Forced adjustment to higher energy prices

• Some energy security• Periodic macroeconomic

adjustment (political business cycle)

• Wooing FDI• Liberalizing conditions for

small business• Price liberalization• Debureaucratization and

improvement in the quality of governance

• No political democratization

• No structural reforms (including reforming large SOEs)

• Low commitment to macroeconomic stability

• Foreign debt as ad-hoc solution

• Geopolitical balancing as substitute for both political and economic reforms

‘Quasi-Chinese scenario’ as a blueprint for the 2010s: plans and limitations

• Two track economy: freedom in greenfields and small business, control everywhere

• Political democratization off the table

• Bargaining with external players only

• Status quo meant to stay indefinitely

• Investment is deterred by the lack of structural reforms

• Political pressure intensifies from BOTH East and the West

• Need to engage with new constitutencies (dialogue with entrepreneurs on liberalization)

• Subsiding of geopolitical competition reduces the space for traditional maneuvering between East and West.

• Understanding that ‘presidents won’t last forever’

Goals for 2010s

• Paramount goal – political survival– Dealing with the consequences of political

business cycle– New basis for economic growth– Energy security– ‘Correcting’ the social contract- including

channels for representation and feedback– New balance in foreign relations

Scenarios for the 2010s

• Reversal to mid-2000s (with possible transfer of power to the older son)

• Status quo ‘quasi-Chinese scenario’

• ‘Managed democracy’

• ‘Pacted transition’ (parties to the pact are external rather than domestic actors’

Scenarios for the 2010s.