The Faustian Bargain
Susan Corke & David Kramer of Freedom House – for New Eastern Europe.
This text originally appears in New Eastern Europe No 2 (III) / 2012, available now for purchase.
Russia calculated that Belarus’s desperation presented it with a Faustian opportunity to regain influence over the country. With the recent added tensions, this deal may bedevil the West’s hopes for democratic reform in Belarus.
After nearly two decades in power, authoritarian leader Alexander Lukashenko brought Belarus to the brink of economic ruin in 2011 with a collapsing currency, severe shortages, soaring inflation, and dwindling hard currency reserves. Lukashenko’s gross economic mismanagement, combined with his ongoing political crackdown, caused his support among Belarusians to drop to an all-time low last September, down to nearly 20 per cent according to a poll conducted by Oleg Manaev from the Minsk-based Independent Institute of Socio-Economic and Political Studies.
It all started going badly wrong for Lukashenko with the December 2010 presidential election, which was widely condemned for fraud and vote-rigging, and then the brutal assault on protesters. Up to that point, Lukashenko had been able to get away with limiting political freedoms in exchange for providing economic stability in the country. But as the value of the Belarusian rouble plummeted, store shelves became empty and real wages declined against the rising prices of consumer staples, with the population last year beginning to blame the government and Lukashenko personally. As 2011 drew to a close, many observers, including these two authors, began to think that Lukashenko faced his gravest crisis to date and that his days as “the last dictator in Europe” might be numbered. As history has shown us in other places, however, it may take longer than expected to unseat a determined dictator. Russia offered a devil’s bargain to Lukashenko that he could not refuse if he wanted to remain in power.
Last November, Russia stepped in with the offer that Lukashenko had long resisted: cash for control of Belarus state-owned assets, such as the sale of Beltransgaz to Russian Gazprom for $2.5 billion. In addition, Russian leaders are offering Minsk $10 billion to build a nuclear plant and are giving Belarus special gas discounts (this is after Russia had reduced energy subsidies to Belarus which exacerbated the financial crisis). For then-Russian Prime Minister Putin, this was another step in advancing his idea of creating a Eurasian Union. It also constituted a defence against having the West’s frontier move closer to Russia’s border. Moreover, Russians are beginning to gain control of Belarusian banks and media outlets. In the short term, these Russian investments and loans have helped Belarus avoid a total economic collapse and provided a lifeline to prop up Lukashenko, at least temporarily. Nonetheless, the price being paid to preserve Lukashenko’s grip on power in terms of Belarus’s independence and assets may engender significant blowback among the elite and population.
Belarus’s financial crisis was a long time in the making, dating back to Lukashenko’s rise to power in 1994 (ironically, through a relatively free and fair election). Instead of adopting the path of political liberalisation, economic reform, and privatisation with the other countries of Central and Eastern Europe after the fall of the Soviet Union, Lukashenko retained a communist-like system including a mismanaged, state-controlled economy that was unsustainable in the long term.
Lukashenko has been and continues to be determined to preserve his own power by any means, and has thus avoided changing course from authoritarian rule and corruption. He has acquiesced to Putin’s asking price for helping him stay in office and stave off protests – but a steep asking price it is. Despite Belarus’s relative isolation, the global economic crisis added further pressure in 2007 and 2008 to Belarus’s financial position. Initially, Lukashenko tried his hand with the West, though only after he caved in to economic sanctions imposed to win the release of political prisoners in 2008. He signalled that with the right financial inducements, he would be open to reforms, and the West, especially the European Union, fell for his tricks and sought to encourage progress to bring this pariah state into the European fold. The International Monetary Fund (IMF) also provided a 2.5 billion dollar emergency loan package at the beginning of 2009. Instead of using the funds as the IMF intended, namely to restructure and liberalise the domestic economy, Lukashenko used the funds to artificially prop up his system through stimulated GDP growth and pre-election boosts in pensions and wages.
The EU jumped in as well, eager to try to use this perceived opening to encourage reforms by inviting Lukashenko to the inaugural Summit of the Eastern Partnership Initiative in 2009, even though less than a year before he had been the target of sanctions by the West. Playing to the West’s desire to advance human rights in Belarus, Lukashenko turned political prisoners into a business by putting them in jail and then releasing them as a gesture of good faith and progress – and in turn, was rewarded for doing so. There was the promise of additional EU financial assistance conditioned on demonstrable signs of progress in Belarus. Holding the December 2010 presidential election in compliance with international democratic standards was considered to be a key test, and billions in EU assistance were dangled before him if he allowed a decent election. Alas, as we all know, Lukashenko failed spectacularly.
A Faustian opportunity
Since declaring victory in the fraudulent presidential election of December 2010, the outcome of which has neither been recognized by the US nor Europe as legitimate, Lukashenko has used increasingly brutal tactics to maintain control of the country. When thousands of people came to the streets to protest against the flawed elections, the regime unleashed a violent response against democratic opposition groups, civil society organizations, and the independent media. The authorities arrested more than 700 individuals, including seven of the nine opposition presidential candidates, and many remained in jail for long terms. Radio Free Europe/Radio Liberty reported that at least 41 people were convicted for participating in the protests. Thomas Hammarberg, Human Rights Commissioner at the Council of Europe, said these are “false charges against peaceful demonstrators,” while the US and EU consider them political prisoners. Presently, there are 15 political prisoners still in jail. Through such techniques as criminalizing libel, intimidating journalists and opposition voices from speaking out on human rights abuses, imposing high fines and draconian jail sentences, Lukashenko attempts to quell popular discontent and prevent conduits for civic action and change.
After hoping that Lukashenko had turned over a new leaf in 2010, the West responded to events of 19th December and after, by imposing a sizeable visa ban and asset freeze against Belarusian officials responsible for human rights abuses. Both the US and EU also implemented economic sanctions as well, albeit limited in scope, and the IMF withheld additional loans. As winter loomed at the end of 2011, with the economy in crisis in Belarus, a desperate situation called for desperate measures. Lukashenko opted to sell Belarus’s lifeline to Russia to preserve his image of a strongman domestically unbent by the predatory West. Russia is a fickle supporter of Belarus and not an enthusiast of the Lukashenko regime, however, Russia calculated that Belarus’s desperation presented it with a Faustian opportunity to regain influence over the isolated country. To Moscow’s irritation over the 17 years of Lukashenko’s rule, Belarus has resisted and evaded Russia’s control and the relationship has been a testy one, filled with mistrust and personal animosity between the countries’ leaders. With relations with the West frayed and liberalization not a serious option, Lukashenko took the Faustian bargain and sold independence in the form of key state assets to Russia.
For the European Union and the United States, the Faustian bargain has created a challenge to the short-term prospects for trying to catalyse democratic change in Belarus. The US and the EU responded to the Russia challenge by taking further steps to signal that they would remain resolute in the policy of applying pressure on the Belarusian regime for democratic change and respect for human rights, starting with the release of political prisoners. The EU is currently considering blacklisting 135 more Belarusian officials, which would ban them from entering the EU and freeze their assets and bank accounts in the EU. The EU Council announced an analogous regulation on February 10th 2012, and stated that, “The adopted amendments expand the criteria for application of restrictive measures and the freezing of assets of persons responsible for serious violations of human rights, or the repression of civil society and democratic opposition, or support of the Lukashenko regime, thus, receiving benefits.” The current EU sanctions list includes 210 people, including not only ministers and senior officials but judges and prosecutors involved in criminal cases following the December 19th elections as well as the trial against imprisoned human rights activist Ales Bialiatski. On January 3rd, President Barack Obama signed into law the Belarus Democracy and Human Rights Act of 2011, which expands the number of Belarusian officials on the US visa and financial sanctions lists to include those involved in the post-election crackdown. Another creative point of pressure in the law is the call for the International Ice Hockey Federation to cancel its plans to hold the 2014 World Ice Hockey Championship in Minsk.
But some central truths should still be the core of the West’s policy. The overarching reality is that Europe will not be “whole, free, and at peace” until the Belarusian people have the power to choose a democratic government for their country and are freed from dictatorship. Belarus’s economy is not sustainable as long as the state plays the dominant role and controls most assets. Lukashenko knows that while the Faustian bargain with Russia has propped up his regime for a while longer, at the cost of his country’s independence, this will not be enough to solve his country’s economic problems in the medium term, let alone in the long run. The West must ensure that it does its part not to allow Lukashenko’s desperate financial shams to breathe life into a repressive regime. The IMF must stand firmly against new loans to a country that has shown no credible signs that it will meet the necessary reform requirements, to say nothing of the fact that it defiantly holds political prisoners.
Given the difficulty of getting support among the 27 EU member states, the US must lead in imposing targeted economic sanctions, as these have been the only tools of pressure applied in the past which have had a demonstrable impact in changing behaviour. In particular, the US must impose sanctions on more state-owned and state-linked enterprises, (a few possible suggestions include state arms manufacturer BelTechExport and the potash company Belaruskali) driving down their attractiveness to prospective buyers and blocking new infusions of funds into the regime’s coffers. Further talk about expanding sanctions is grossly insufficient; the time to act was yesterday. Only political and practical willingness to put more sanctions into effect will make a difference at this point.
Russia’s bargain ensured Lukashenko’s immediate survival and some space to manoeuvre. Now is a critical window of opportunity for the US and EU to craft a viable and consistent policy vis-à-vis the regime and advance democratic changes in the country, before the next crisis hits Belarus or before Russia or some other like-minded regime bails out Lukashenko. While Lukashenko’s support among Belarusians, who suffered through the economic crisis, remains low, a nation-wide uprising is a remote possibility in Belarus in the current state of affairs. With the September 2012 parliamentary election approaching, the regime is trying to again manipulate the social contract to regain support and confidence before then. Both Lukashenko and Prime Minister Mikhail Myasnikovich have made brash promises that the economy will improve in 2012 and that the average worker’s salary will go back up to pre-crisis levels. The West must make sure Lukashenko does not succeed.
The Belarusian people deserve to live in freedom and should no longer be isolated at the hands of a dictator with the rest of the world impotently standing by. The cost is most acute in human terms; many leading activists are imprisoned or abroad. Their health and their lives are in danger. Ales Bialiatski, Chairperson of the Human Rights Center “Viasna” and a Vice President of the International Federation for Human Rights, was charged with massive tax evasion and is currently in custody, facing up to seven years behind bars. Germany’s human rights commissioner, Markus Loening, said that Belarus recently blocked his plans to visit the country and meet with Bialiatski, but this was a necessary attempt to keep the spotlight on this and other cases.
Finally released in April 2012, Andrei Sannikau, a presidential candidate in 2010, has reportedly been subjected to severe mistreatment behind bars and for months at a time his family and defence lawyers have been denied access to him. Ales Michahlevic, a Belarusian political activist who himself was imprisoned and broken by torture, publicly testified to the abuse he suffered in a testimony on the November 15th 2011 before the US Commission on Security and Cooperation in Europe. He stated that he “was brought to a KGB detention centre, where he spent the next two months. During my imprisonment, I was subjected to constant mental and physical torture in order to coerce a confession of guilt.”
The West needs to keep unrelenting pressure on the Lukashenko regime to force the release and full rehabilitation of all political prisoners and demand the reinstatement of lawyers disbarred for representing political prisoners during post-election trials. This is the only way to win their freedom and ensure full societal integration.
It is critical that Belarusian citizens know that sanctions are only directed against the regime and that our efforts are directed at ending their suffering under Lukashenko’s repression. In a country where the regime severely restricts freedom of expression and manipulates the mass media, it will be a significant but necessary challenge for the West to get behind the information curtain to make this case convincingly to the Belarusian people. However, more than a convincing argument is needed: the West has and must continue to provide assistance to the people and civil society to foster a more democratic future. The post-election-crackdown pledge of $100 million by western governments was an important sign of international solidarity for the people of Belarus that the pressure is against the elites, but that the West will support civil society and ordinary citizens.
The next move
But we should not stop there. It is important now for international donors to coordinate and expedite the flow of assistance to the people and civil society actors who need it, including those beyond Minsk who may not have benefited previously, once Lukashenko is gone from the scene. Preparing for a significant assistance package now is important to let Belarusians know that there is a light at the end of the Lukashenko tunnel. At the same time that the EU is expanding its visa ban list against abusive officials, it should also simplify visa processes for ordinary Belarusians to signal that they are welcome in Europe, but their repressors are not. The West also needs to prepare a package of economic and political assistance should Lukashenko flee or be removed from power. This is critical to demonstrate that there is a more democratic alternative for the people of Belarus than the desperate path their country is currently on. A post-Lukashenko Belarus will be welcomed in Europe; when that day is on the horizon, the EU should reconsider the prospect of a partnership agreement with Belarus.
The West needs to be clear that Belarus and its people are priorities. Belarus, after all, is in Europe. Russia upped the ante and drove a hard bargain and is viewing Belarus in typical zero-sum terms. The West needs to maintain solidarity now, not let up on pressure, and take actions to catalyse democratic change and transition. An enduring dictatorship, presiding over a repressive political system and an unreformed economic time-bomb on the border of the EU, facing absorption by Russia, should be a top priority for the West. If we wait, it will be too late.
The West has used the spectre of Russia as a reason to compromise with Lukashenko in the past out of fear that getting tougher with Lukashenko would drive Belarus into Russia’s hands. Viewing Belarus through a Russian prism is terribly misguided. Given that Russia has its own domestic political and economic challenges to worry about, it is unlikely its support will be enough to continue propping up Lukashenko forever. It is time for the West to make the next move.
Susan Corke is Director for Eurasia Programs at Freedom House based in Washington, DC.
David J. Kramer is the President of Freedom House.
This text originally appeared in New Eastern Europe No 2 (III) / 2012, available now for purchase.