Lukashenka has hysterics: he didn’t get money again

The model of freebie and promise bargaining created by the Belarusian dictator has become outdated, the Russian mass media report.

As internet newspaper Segonia.ru reminds, at the beginning of summer, Lukashenka called Aleksey Kudrin a “wacko” for the latter had forecasted the Belarusian economy would face problems in late autumn. On October 29, Lukashenka said the situation in the country was catastrophic and the economy state was “critical”. Some days later, on November 2, Lukashenka harshly criticized the European Union. He repeated again that he wasn’t going to meet halfway for tighter cooperation with European courtiers. The events – the summer rebuke to Kudrin, announcement of a catastrophic situation in the country and criticism of the EU positions – would seem to be unrelated, but they stand together.

It’s not a secret that the Belarusian economic “miracle”, often called so by Belarusian governmental propaganda, was based on “special relations” with Russia. Belarus bought energy resources at Russian domestic prices and sold products at market prices. Grey schemes of Russian oil re-export gave additional finance. The parties close eyes to the scheme because it was planned to sign union agreements and start a big-scale integration of the two states. Lukashenka gave dozens of promises every year, signed agreements, but hasn’t fulfilled any of them. Formally, Aleksandr Lukashenka hasn’t violated the arrangements, but is always finding something preventing from making the last step.

The policy of “separating flies from cutlets” was launched by Putin’s government in 2004. If Belarus sells goods in Russia at world prices, why shouldn’t they buy Russian goods at world prices too? It will be possible to go to domestic prices after a real integration. Lukashenka shouted he and his people would live in dugouts, but wouldn’t be broken by economic pressure, he announced he would go to West, to China and told other geopolitical fairytales. Having wandered for a year and having not found financial resources for the economic “miracle”, the Belarusian ministers asked Russia for loans.

It was supposed formally that loans should be taken for modernization and restructuring of outdated and uncompetitive industry. It turned out to be les poetic in reality. The loans have been spent to create the appearance of well-being. But credits and interest rate must be paid, their sums can’t be compared with profits from oil off-shore. More and more loans were needed. The EU didn’t refuse to give financial aid to Belarus, but demanded guarantees of efficient use of resources, in first turn, real liberalization, privatization and transferring to market economy. As usual, Lukashenka tried to fool a partner by giving promises and making loud statements, but then refusing to fulfil uncomfortable conditions.

The things were sorted out when the crises began. Rather moderate Belarusian goods found no buyers. Export reduced several times. The source of foreign currency dried up. The country had to apply to the International Monetary Fund to hold financial reserves on a minimal level. Every sign of the economic miracle vanished. Most big enterprises work three days a week, wages have fallen two- or threefold. The Belarusian ruble was devalued on New Year’s eve. But even these facts didn’t make Lukashenka watch the reality, the feast in time of plague goes on. Millions of dollars are still wasted for subsidising loss making state-run enterprises, tens of millions of dollars are spent on military parades on occasion of state holidays, dozens of ice-rinks are built to create the appearance of sports movement, etc.

In May, Minister of finance Kudrin refused to give a loan to Belarus, wasting credits. Attempts to receive loans only from the EU failed. The sums offered seemed derisive to Lukashenka. Moreover, Europe demanded to accept their conditions on economy liberalization to start significant financing. The liberalization must have been accepted and started in practice. The situation is aggravated with the fact that Russia has also stopped financing unless the real linearization is started. There’s no more reason to manoeuvre between East and West.

The Belarusian ruler staked his all in August. The bet was sovereignty, as usual. Moscow and Brussels were hinted the republic was choosing its way to move forward. Ti could be either the common European family, or the family Russian peoples. The prices remained the same – $5–10bn of gratuitous aid a year. The terms of integration were obscure. Russia’s reply was visit of PM Sidorski to meet Putin. Russia rejected the doubtful deal of backing the wilful union state. It was the unsuccessful meeting that provoked Lukashenka to speak about the catastrophe. A reply from the EU was received at the beginning of the week. They found the offer dubious, too. What step is Lukashenka going to make now? He is more likely to go back to the drawing board. He will ask money from Russia, then from the EU, then China, and then start a circle again.

Lukashenka has failed to create the main thing during 15 years of his rule – the all-sufficient state able to give dignified life to citizens from own funds. The freebie and promises bargaining model created has become outdated, but Lukashenka can’t create a new system without fundamental changes.