Authoritarian dictatorship has been established in Belarus in the result of the November 1996 coup d’etat. President Lukashenko carried it out in the form of the national referendum. It was a total fraud. Special commission of the Supreme Council of the Republic of Belarus analysed and investigated the activities of President and issued a report on 80 pages. It says that Lukashenko violated 130 articles of the Constitution and other normative acts including Criminal Code. In response to this investigation a criminal case was opened and Chairman of the Commission Deputy of the Supreme Council Victor Gonchar was brought to the public prosecutor’s office by force. His flat was searched. He was accused of spreading slander on the head of the state.

In the beginning of September two teenagers were caught by the police (16 and 18 year old) and sent to prison for allegedly writing graffiti against President. They have been kept in prison without any formal accusation for more than two weeks. Growing protests of not only NGOs but ordinary people made the authorities justify their behavior. However the boys are still in prison. Thus another stage of repression against people and structures of the civil society has been initiated. Lukashenko activities radicalized Belarussian opposition. On September 10, there was a bomb explosion in the court of one of the Minsk districts. Many cases against opposition leaders were heard in this court. In May there was a bomb explosion on the gas pipe in one of the regions of Belarus. Belarussian Liberation Army took responsibility for these acts. It is obvious that violent actions against opposition will cause violence against state institutions. We could have the second Ulster in Belarus. Taking into consideration the fact that Belarus is at the crossroads of transport communications from the West to Russia (gas pipes, oil pipes, highways) it could blow up stability in the region and cause huge problems for all neighboring countries. Recent murder of one of the members of the President team in Mogilyov region made Lukashenko announce that any crime must immediately be followed by punishment. There is a danger that he might introduce a simplified version of court system that resembles very much Stalin system after Kirov’s murder in 1934.

Recent history of Belarus is the history of gradual destruction of democracy, human rights and freedoms, the institute of private property. On the first stage President dispersed the legislative body of the country - the Supreme Council. On the second stage he challenged the existence of major political parties that opposed his law of the jungle. All political parties that opposed President and did not accept his “one man show” faced financial and organisational difficulties. Offices of all opposition party are eavesdropped as well as apartments of major political leaders. On the third stage the most influential Belarussian NGOs were the subject of president’s attention. As a result Soros Foundation which invested about 13 mln. USD into the Republic (7.5 mln. Was financial aid to the state structures) decided to close its office in the Republic as it considers illegal to pay 3 mln. USD fine. It is the first such case in all post-socialist countries. Besides Security Council audited the Research centre “East-West”, charitable Foundation “Children of Chernobyl”. They were fined; their bank accounts were blocked. A criminal case was opened against president of the Foundation Mr. Grushevoi and his wife. Now they are in Germany in exile.

The fourth stage of the “performance” “President vs. the people” meant the assault on independent mass media: newspaper and TV reporters. In April the Russian TV channel NTV reporter Alexander Stupnikov was ousted from the country. In August Belarussian citizen, reporter of the Russian TV channel ORT Pavel Sheremet and Dmitry Zavadski were arrested allegedly for illegal crossing of the state border. Pavel Sheremet is still in prison. For more than a week another group of Russian reporters was kept in prison obviously for political reasons. Editor-in-chief of the newspaper “Svaboda” was shot at. More than a thousand and a half people were detained and arrested in Minsk just this year. Among them there were more that 10 Deputies of the Supreme Soviet who had parliamentary immunity. In many cases the size of the fine exceeded the annual income of an average person. Political prisoners are the reality of today’s Belarus. In the beginning of September the Czech Republic gave the status of political refugees to two Belarussians who published an independent newspaper in Vitebsk. The only daily opposition paper “Narodnaya Volya” can not be published in Belarus. State mass media are monopolised by the executive power. Democratic opposition has no access to state-run radio and television. Lukashenko openly says all telephones of opposition leaders and independent newspapers are eavesdropped. He passed decrees to re-register all mass media by January 1, 1998 as well as all printing facilities. The Law “On President” makes any criticism of head of the state a reason for criminal persecution.

People are persecuted for mere participation in the events organised by the opposition. After a hurricane that caused major damage for south-western part of Belarus members of the United Civil Party (UCP) volunteered to help the people who suffered from the natural calamity. The authorities ordered farmers and local authorities to reject help from opposition parties and NGOs. Some students who took part in the summer school (it was arranged by the UCP) were warned by the authorities of their educational institutions that they might be expelled for such activities. The same thing happens to participants of mass actions of protest.

Russian mass media are one of the most effective supporters of Belarussian opposition. Unfortunately most part of Belarussian regions (villages and small towns) can not watch major Russian TV channels and read Belarussian opposition and Russian newspapers. As a result they do have objective true information about the situation in the Republic. According to the latest opinion poll Lukashenko’ electorate is uneducated old people and pensioners with low income from eastern provinces of the Republic, mainly women. In Minsk Lukashenko has support of only 17,5%, in the countryside - 69,9%; in big cities - 38%, in small towns - 40,2%.

Monopolisation of the civil society

President intends to monopolise all structures of civil society and put them under his control. Under his direct supervision a youth organisation was formed. It is an attempt to restore komsomol (young communist league). This organisation (Belarussian Patriotic Union of Youth) was granted huge privileges that make it a very powerful structure. It has direct impact on army subscription, employment, and access to higher educational institutions. It is directly financed from the budget and off-budget presidential fund which is beyond public and state bodies control. The annual financing of this organisation (including tax breaks, no import duties, no VAT and excise taxes) will amount to 900 mln. USD if President gives them everything they ask for. Official trade unions work hand in hand with the government. They protect their meagre property and privileges.

President also made attempts to monopolise humanitarian organisations. With this purpose he set up a state foundation which is supposed to “co-ordinate” activities of non-government humanitarian organisations. In fact the purpose of this action is to show the public that only president cares about the poor and the disabled.

President does not have his own political party. However what he does to the country is very closely associated with programmes of the communist and agrarian parties. There are 34 political parties in Belarus. The Communist party broke up into two after the referendum. One supports Lukashenko (leader is Mr. Chikin), the other is in opposition to the existing regime (leaders are Kalyakin and Novikov). Agrarian party is another left wing party, which is represented in the parliament. There are three social democratic parties in Belarus. All of them are in strong opposition to President. However driven by personal ambitions of their leaders they can hardly make one political structure. United Civil Party is a right wing liberal conservative party. Belarusian Popular Front (BPF) is a right wing national political party though there are some major differences in the policy of the UCP and BPF concerning relations with Russia, economic reforms, and tactics of struggle against the existing regime.

One of the major problems of Belarussian opposition is lack of a charismatic authoritative leader who would be able to unite political and public organisations and could beat Lukashenko. Leaders of major parties can not unite forces and resources to start a co-ordinated campaign against dictatorship. Besides state mass media creates an image of opposition leaders as people who are driven solely by personal ambitions, envy and desire to gain from state power.

Monopolisation of economy

In fact Lukashenko carried out the process of privatisation very quickly. He has done it his own way. Instead of privatising and restructuring industry, agriculture, trade, and services he privatised the judicial system, statistics, army and police. Besides he formed a parallel budget that according to some estimations equals the official one. “L’etat - s’est moi” - this is about Belarus and our President.

Official statistics reported 11% growth of GDP for the first half of the year. Private sector produces only 0,1% of GDP. The state formally owns 86% of all property. The remaining part is different stock holding companies that are controlled by the state. Small privatisation has been blocked in 1996 and 1997. In the project of the budget for 1998 the authorities do not include revenues from privatisation at all.

Of course in some industries growth really took place. But it was administratively driven not market oriented. At the same time there is steady increase of stock of unsold goods, which amounts to 570 mln. USD for the first half of the year. The growth is due to increase of barter exchange with Russia (there are schemes that enable state officials both in Russia and Belarus to earn money at the expense of the budget and producers and taxpayers) which destroys the financial system of the Republic. For the first half of the year inflation was 41.7% and producers’ price index was over 72%. Another factor of production increase is construction. This is also a trick of calculation. President ordered to provide very cheap building credits to young families and other social categories. The source of the credits was emission of the National bank, which turned into one of the units of the President Administration. All economy is under severe inflationary pressure as agriculture, machine building industry, construction are financed not by domestic and foreign investors but by printing worthless paper called Belarussian roubles.

Belarussian economy has been working with negative interest rate for about a year. It cost owners of deposits about 200 mln. of direct losses. Economic subjects do not access to currency exchange, which is administratively regulated. At the same time it is illegal for economic subjects to buy hard currency at the market rate. The premium of the black market at the currency exchange is about 35%. Money substitutes crowd out normal money and destroy the financial system. 88% of the budget deficit is financed by inflationary means. President makes National bank buy government bonds and increase the amount of paper money in the economy.

The main characteristics of the Belarussian economy are:

inequality of state-owned and private enterprises in economic conditions and in access to financial and material resources

unrestructured industry. 80% of all capital goods are physically and morally obsolete and depreciated. Overall profitability of industry is only about 10%

the government’s common practice is interference into the price formation

major capital markets either do not exist (security, land, real estate, labour) or are heavily regulated

government expenditures in GDP amount are about 60%

confiscatory character of taxation system with very high rates of income and corporate taxes

size of the “grey economy” is about 85% of the officially registered GDP (about 10 bln. USD per year)

major restrictions on international trade (high tariffs, impossibility of profit repatriation), small business development. Accumulative FDI is only 3,5 USD per person.

To further monopolise all economic spheres president created several structures which are supposed to make export-import operations and raw materials supply more efficient. Concern “Belresursy”, state amalgamations “Belvneshtorginvest”, “Belaagrointorg”, “National Energy Company” will soon crowd out private businesses from wholesale trade. State enterprises are completely dependent on decision of corresponding ministries and state concerns. Market mechanism “profit-losses” does not work in Belarus, as there are no objective market price indicators to estimate the efficiency of an enterprise performance and to form rational expectations for the future.

Belarus is the only Republic in the world that makes the unemployed work for a certain amount of time at public works to get unemployment benefit. About 60% of the population live under poverty line. An average monthly salary is 50-55 USD. Prices for many goods increase world prices. Demographic situation of the Republic is very grave. Old people make about 23% of all population. The inefficient state pay-as-you-go system is virtually bankrupt. 1,6 workers pay instalment payments for 1 pensioner and this ratio is worsening. Pension and wage arrears though not so huge as in Russia are steadily increasing. Savings rate is about 10% of GDP. The most popular form of saving is cash hard currency, which is not deposited in banks. There are no other financial instruments to save money. The level of trust to the economic policy of the government is critical.

Belarus is a small open economy with a great degree of dependence on external markets. Its main trade partners are Russia, Ukraine and other CIS countries, Germany and Poland. Main import items are oil and gas (30,9% of all import), machinery and equipment –13,1%, chemicals – 10,4%, food products – 5,6%, plastics – 5%. Main export items are textiles, timber and lumber, construction materials, fertilisers, trucks and leather. Its trade policy is purely mercantilist. A State programme of Import Substitution has been passed recently. Domestic industry and agriculture relies heavily on subsidies, protective tariffs, government guarantees. All these measures drive marginal producers and traders off business.

Russia’s position

Though Russian mass media and some Russian democratic parties verbally support opposition and democracy in Belarus the Russian government and president Yeltsyn ignore rude violations of human rights and freedoms in the Republic. At signing the Union with Belarus the Russians took the commitment to guarantee democracy. In some cases President Lukashenko ostensibly acts contrary to all commonly accepted rules and procedures. Russian monopolies are pleased with his policies as they have an opportunity to buy up the most lucrative pieces of property. Russia can not even protect its own citizens in Belarus. The major reason for such neglect of basic human rights and freedoms is Russia’s weakness both in geo-politics and economy on the one hand and double standards on the other. However recent actions of Russian President inspire optimist that Russia has joined the international community in condemning rude violations of human rights and freedoms.

However Russia is the only country which can effectively influence Belarus. International pressure on Russia is too weak. Now this country is interested in joining European and world economic organisations. It largely depends on foreign resources. The West does not use this aspect to make Russia influence the Belarussian authoritarian regime. Lukashenko’s clear goal is to enter the Russian political field and to take part in the next presidential election in Russia. However he is largely underestimated by Russian financial, intellectual and political elites. At the same time he helps consolidate national and communist opposition in Russia, which is in favour of all Belarussian President is doing.

Basic human rights and freedoms are not an interior affair of any country as Russia and Lukashenko keep repeating. Belarus is the only post-communist country, which after a short hesitation made a sharp turn back to dictatorship. It stimulates all destructive forces not only in CIS countries but also in central Europe. Belarus has turned into a source of major regional threat to stability and piece. If we remain impartial observers we are likely to accelerate spreading of Belarussian dreadful “disease” to neighbouring countries. Liberty of all the region will be put into danger.