Sergei Guriev: "Tax Maneuver" Will Dramatically Hurt Lukashenka

Belarus needs to figure out how to live without Russian subsidies right now.

On October 9-10, Warsaw hosts the annual Boris Nemtsov Forum - a conference uniting politicians, activists, intellectuals and journalists who share liberal values and are interested in establishing a dialogue between Russians and Europeans. Professor of Economics at the Paris School of Political Science Sergei Guriev, former rector of the New Economic School and chief economist of the European Bank for Reconstruction and Development, told Charter97.org about the "tax maneuver," sanctions against Russia, and also about what threatens the independence of Belarus.

- Aleksei Navalny spoke in favor of personal sanctions imposed by the West. But sanctions against Russia also have an economic impact on Putin's regime. What do you think about it?

- Aleksei Navalny as a Russian politician can't call for sanctions that will make the Russian people poorer. But we must understand that individual sanctions, as long as those people who are subject to sanctions are in power, will in one way or another affect Russian pensioners and taxpayers. As the regime will compensate to those people who are subject to sanctions for losses at the expense of Russian taxpayers and pensioners. Therefore, we must not hope that there are material sanctions that will affect individuals. We have already seen this, even entire laws have been adopted to ensure that people who are subject to sanctions receive a special tax regime from the state. But judging by what those people who are subject to sanctions say, they do not want to be subject to them not only because of material losses, but also because of changes in their lifestyle. As Aleksei Navalny correctly said, the life strategy for many of these people is connected with their presence in the West, with their travels and so on.

- What do you think about the subsidies that Russia provides to the Lukashenka regime?

- This is part of Russia's foreign policy, which is changing a bit now, by the way. The main subsidies were provided to Belarus through the reduced oil prices. But now, due to the so-called "tax maneuver," these subsidies will be gradually eliminated over the next six years (from 2019 to 2025), and in this sense Belarus has to figure out how to live without them. As for loans, they are certainly important, however, these are just loans. Their number is not that great, and even if they are refinanced, they are not infinite. The main ones were oil subsidies, and they are being closed now anyway.

- Lukashenka recently said that Russia, as the successor to the USSR, could compensate Belarus for the Chernobyl disaster. In your opinion, why does he remember about it right now?

- It seems to me that all the talks that Russia should compensate Belarus for something are connected with the "tax maneuver. These are huge sums for Belarus. Now we are talking about $300 million a year, and by 2024 we will be talking about $2 billion a year. This is about three to four percent of the Belarusian GDP. These are huge sums. Therefore, Lukashenka will use any opportunity to ask for compensation.

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