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.  

On January 19, 2004 six leading political parties of the Republic of Belarus - United Civil Party, Belarusian People's Front, Belarusian Social Democratic Hradama, the Belarusian Party of Communists, Belarusian Labor Party and Belarusian Green Party - alongside with more than 200 non-government organizations and associations formed the People’s Coalition «5+». It is a major victory of all pro-democratic forces in Belarus. The Coalition of ideologically different parties is based on the fundamentals that any civilized political force should support: human rights and freedoms, sovereignty of the country and democracy. We are to bring democracy and the rule of law first before we argue about policy differences. The Coalition came out with the list of 220 people who will run for the parliamentary elections in autumn 2004. The list includes not just members of political parties but the representatives of education, cultural and business communities. The Coalition is planning to hold 110 campaigns in each constituency and one national campaign that will promote its the common program.  

The misperception of the Belarusian social economic model and its political management is quite wide spread both in the east and West. Lukashenko is claimed to get the best of the two worlds: socialism and capitalism. On the one hand he prevented formation of overpowering local oligarchs or robber barons as it were. He did not let “public assets” to be unfairly distributed among representatives of nomenclature and the underworld. On the other hand he managed to build an effective social security system. Of course it does not have resources like those of Germany or France. But still many people believe that this is an adequate response to systemic challenges of a transitional state. These are dangerous myths that are based either on lack of information and deep analysis or on official statistics and reports that resemble rather propaganda tools than objective evaluation of the system. So let’s see how fair, secure, stable, feasible and economically effective is the Belarusian model.  

After breakup of the Euro-Asian system of centralized planning and decision making 27 new independent states were formed. The Republic of Belarus inherited from the Soviet Union relatively developed production, transportation, telecommunication and education infrastructure. Many industrial enterprises (tractor plant, truck plant, meat processing plants, TV and refrigerator plants etc.) were built to target the Soviet Union market or the whole socialist world. According to Soviet quality standards many Belarusian goods were quite competitive on that market provided there was no market price at all. Distribution of goods and capital was done along the lines of Communist party decisions rather than consumer and entrepreneur preferences. Information distortions for effective market-based production and investment were so big that the only rationality that existed was the rationality of arbitrary decisions of few authorized institutions (for example Gosplan, Gossnab branch ministries). At the same time rational expectations were quite easy to form as the framework of the centralized decision making process operated under quite rigid rules. The system was close to implementing the hypothetical maxim of economics – “all other factors being equal”.  

Corruption Perception Index 2003 score: 4.2, 53 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”.

Uneasy anticipation, a sense of foreboding and the hope-crashing doom accompanied the parliamentary election and referendum campaign in Belarus. Everybody pretty much knew the results of both the referendum and the parliamentary elections long in advance. On October 17, it became obvious that the elections and the referendum have been rigged. The scale of violations has been unprecedented. The people felt cheated and depressed.