Part A. Factual information  

Corruption Perception Index 2003 score: 4.2, 53^rd place out of 133 countries Bribe Payer Index 2002 score: not surveyed

On October 2, 2002 the president passed the decree № 500 “On the state program to intensify fight with corruption for the period of 2002 – 2006”

On May 26, 2003 the law “On ratification of Convention on criminal responsibility for corruption” № 199-З was put into force.

On November 5, 2003 the Council of Ministers passed the Resolution № 1471 “On adoption of the plan of activities to counteract corruption in state bodies”.

Decree of the president №122 as of March 1, 2004 “On signing by the Republic of Belarus the Convention of the United Nations against corruption”.

Decree of the president № 75 as of February 13, 2004 “On adoption the state program of strengthening fight against corruption in 2004 – 2005”.

After breakup of the Soviet Union millions of people around the world cried with joy, “Communism is dead! Socialism is dead!”. At the same time many university professors and academicians, politicians and political scientists stated somehow less audibly, “Long live socialism! Long live social democracy!” They did not want to start an open struggle with the people who after more than 70 years of struggle finally broke free. They behaved like a well-known villain Ellsworth Toohee from Ayn Rand’s novel “The Fountainhead”. They were cunning enough not to stick their necks out. They were designing a new loop that the people will voluntarily put their neck into and give then – the masters of their souls the end of the rope to manage and pull when necessary.  

The authorities ran out of carrots and stick to sticks

Democratic forces in Belarus face quite a few major challenges. They must meet them if they want to make the Belarusian version of “Orange revolution” happen in the country. After staging the referendum and the campaign “Parliamentary elections” in October 2005 Belarusian authorities demonstrated their determination to increase pressure on the civil society and to intensify the persecution of political and civic leaders. They use law as a carrot and a stick. “Carrots” land in pockets of bureaucrats, big state companies and monopolies, force structures, judges, members of election bodies, state media and local nomenclature. Sticks are for political parties, NGOs, independent media, human rights organizations, independent educational and research institutions. People who ensure stability of the regime are paid $400 – 700 a month and provided with various social benefits. This kind of treatment blocks their incentives to consider alternative modes of behavior especially contacts with the opposition represented by any non-government institution (a political party, a think tank, an NGO or even an individual). Apart from that, local bodies of power working with their businesses distribute a big chunk of the general budget defalcating state funds and reaping the monopoly rent.

It is not problematic to build up relations between European Union and a country the government of which wants cooperation and integration on the platform of democracy, human rights and market economy. It is quite a challenge to work out mechanisms and programs, to find means and resources, to come up with institutions to deal with a country, the government of which mocks at democracy, ignores human rights and monopolizes most of economic activity. Standard European way that proved to be effective in dealing with like-minded governments is not adequate in coping with Belarus. The idea behind EU’s Neighborhood Policy is primarily to assist people, not governments. In case of a democratic country it is almost the same but as afr as Belarus is concerned it is definitely not so.  

1. Belarus: crisis of market socialism

Republic of Belarus is a neo-planned economy with high concentration of economic decision-making at the very top of political power hierarchy. It has been pursuing basic production and distribution patterns of both socialist theorists and Keynesians. In order to grasp the essence of the Belarussian system of decision making it is necessary to determine its main characteristics and parameters: 1) who, in what branches and to what extent makes economic decisions, 2) how the institute of private property works on markets of all forms of capital (money, land, goods and services and labor), 3) motivation of main economic players (capital owners, entrepreneurs and consumers), 4) observation of the principle of equal opportunities and conditions for all economic subjects including the state. 5) effectiveness of legal judicial system in protecting property rights. Belarussian system of decision making is in many respects incompatible with the Western model that is driven and shaped by globalization process. Instead of enhancing growth it hampers it and increases transaction costs, reducing competitiveness of domestic producers.

People respond to incentives. Poor and desperate people respond to incentives in a more urgent manner. Survival behavioral patterns differ much from behavior of middle class people in a stable society in terms of abiding by law, following moral principle and enhancing informal human institutions. Generally, transitional economies are relatively poor. Their governments try to copy the basic European pattern of welfare state hence they overregulate, overtax and overspend. Bureaucrats use various sophisticated econometric modes to boast their omniscience and ability to define the “optimal distribution pattern” and determine “strategic sectors” and “national champions of economic growth”. They increase the risk of making investment mistakes and hence the danger of structural imbalances.  

Local elections in Belarus proved once again that the authorities of Belarus have separated the society, ordinary people from the state. No matter how strong the support for democratic anti-government candidates is election commissions protected by the executive power and bad legislation come out with the predetermined results. Apathy, disillusionment and despair in the society are growing. How could people who blame the authorities for soaring prices (utility services became almost 500% more expensive in 2002), social security and medical services crisis, growing unemployment and wage and debt arrears vote for the candidates of these authorities? The authorities held the elections virtually without any control of the civil society or international community. The institute of observation has been turned into a meaningless procedure as 1) observers can not observe the whole process on the ground, 2) they can not control counting of votes and 3) election commissions do not have the obligation to issues protocols and sign them when counting is completed and results announced. Thus in spite of active participation of democratic political parties and independent candidates the authorities blocked their entrance into the system of legislative power on the local level. Though these bodies in Belarus have little power the central government wanted to demoralize representatives of the civil society and convinced the public that they fully control the situation.  

“To integrate or not to integrate”, this is no longer a question. History of the world development proved many times that the only meaningful and rational answer to this question is “yes”. Positive experience of European Union, NAFTA, Asian economic cooperation agreements proved to work much better than mercantilist practices of the past. Free trade, non-discriminatory access to markets, freedom of movement of capital, goods, services and labor is a must for regional and world prosperity and stability. As famous Austrian economist L. von Mises said, if goods do not cross borders armies do.  

Belarusian authorities chose the most cynical and blatant way to urge the Parliamentary Assembly of the Council of Europe to give the Chamber of Representatives of the National Assembly of Belarus (the legislative body) a special guest status. The normal, civilized way a serious partner takes is to comply with standards and norms of PACE: to abolish capital punishment, to pass election legislation that ensures holding free and fair elections, to guarantee human rights and freedoms, freedom of expression. expand the powers of the parliament and to stop persecuting people for their political views. But the authorities of Belarus headed by A. Lukashenko decided to take another way. They believe that Europe is just too overwhelmed with its own problems to pay close attention to those of Belarus. EU enlargement, transatlantic relations, Iraq and North Korea, Middle East and Iran – who would draw attention to “minor” transgressions of Belarusian inexperienced young authoritarian leader? Belarusian authorities believe that PACE is too tired of dealing with Belarus. It is indifferent to its problems and it does not have any solution to them. Hence it seems to official Minsk that PACE would find it the easiest to get Belarus in counting on the process rather than on the result. As it often happens the easy solution is far from being the best.  

Over a year after the presidential election in Belarus the authorities of Belarus have almost completed self-isolation of the country. Declaring multi-vector foreign policy A. Lukashenko has severed ties with Russia that has been supporting him for the last 8 years. Having ousted Advisory Monitoring Group of OSCE from Minsk, having no status in the Council of Europe or any other respectable international organization, having rather reserved relations with Lithuania, Ukraine and Poland Lukashenko chose to attack the policies pursued by the Russian president Vladimir Putin.