The global economic crisis hit Belarus with a vengeance in 2009. The government was forced to accept a 40% devaluation of its currency and a $2.5 billion loan from the IMF helped the government to tread water for a while. The loan measures were accompanied by a massive privatization programme. But by the end of the year, as was commented on in the Resolution on Eastern Europe passed by December’s CWI World Congress, a huge economic crisis was already building up. President Lukashenko called an early election in December 2010, which, as planned, he naturally won! The election results were followed by the biggest protests seen in the country for many years, during which riot police brutally attacked the demonstrators. All the main opposition candidates were arrested and are still incarcerated in Lukashenko’s jails.
Empty shelves in Minsk shops - the poster announces there is no sugar or cooking oil on sale.
The terrorist attack which took place on the capital’s metro system at the end of last week, killing 13 people, exposed the social and political explosion that is developing in the country. Within hours of the attack, the regime blamed Russia, anarchists, the West and “mad people”. A short while later, it was announced that a “turner” and a “fitter” from one of Minsk’s factories had been arrested. Lukashenko launched a TV tirade against the workforce of the factory for allowing these people to ‘plan their act’. He claimed that the explosives had been purchased on the internet. A wave of arrests of other opposition figures followed. Clearly the repressive atmosphere in Belarus’s factories and restrictions on the internet is being stepped up.
President Lukashenko visited site of bomb blast "to lay flowers"
Happy New Year!
Inflation has been running at over 10% a year for two years in Belarus. After Ukraine, this was the highest rate in Europe. The main reasons for this were the fall in production and the use of the printing presses to maintain an image of financial stability. In order to defend their savings, the population have been attempting to buy up what they see as more reliable currencies - the dollar and euro.
The money pumped in by the government to buy off the electorate before the New Year (wages were increased across the board by 15%) is now making the situation worse. Prices are rising almost uncontrollably. Potatoes increased in price by 30% in January and February (notwithstanding the fact that in Belarus the potato crop grew by 10% last year). In the first three weeks of February, grain increased by 15%, sugar by 10% and beef by 5%. The price of housing and energy jumped. Water and sewage prices went up by 15% and gas by 83%. Despite the pre-election wage rise, real wages have since then fallen by 12.9%.
Unbelievably, Lukashenko passed his now notorious ‘Decree No 4’ in January removing all state regulation of prices (on socially important items such as milk and bread). This has been done in the interests of the privatization programme, which was drawn up following the advice of the World Bank and IMF.
Queues at currency exchange points are beginning to reach panic levels. Oil was poured on the fire in March when, at the recommendation of the IMF, the ruble exchange rate was freed.
The IMF’s argument was that unless severe budget cuts were made external debts would grow to 75% of the GDP. They argued, “We seriously believe that devaluation is a good idea. But it is not the only way out. We could also recommend a sharp tightening of budget, monetary, credit and wage policies”.
Now, although the National Bank has released the control corridor around the exchange rate to 10% in the hope of allowing gradual deflation, the situation has escalated out of control.
The black market exchange rate is now up to 30% higher than the official bank rate. Most dramatically, imported goods are disappearing from the shops. In scenes reminiscent of the collapse of the Soviet Union in the late eighties, supermarket shelves are now bare of essential products.
Lukashenko turns East
In this situation, Lukashenko has only two ways to turn – to Russia or to the West. Lukashenko is hoping now to get money from Moscow. The difficulty he has is that he can no longer negotiate conditions; the banks simply dictate their own. If the official course of the Belarussian ruble is 3100 to the dollar, in Moscow it is 5400. Industry now has to operate using black market currency, while the banks have, in reality, run out of cash.
The bank fever is getting more and more severe. The press carry stories of fights breaking out in queues and exchange points being stormed. But Russia is not hurrying to give credit. It is demanding concrete steps to privatisation and a plan for overcoming the crisis. To date, the Russian government is only prepared to lend $1 billion, not enough to even pay the money Belarus owes Russia for gas.
The Belarussian economy is in a dead-end. The regime plans to cut the budget, cut jobs and move to mass privatisation. In the largest Minsk factories, the workers are already talking about the need for strikes and the former apathy is being pushed aside by anger. The working class is no longer prepared to tolerate the Lukashenko regime.
The KGB, which in Belarus has not even changed its name from Soviet times, has ears in every factory and noticed this change in mood. The dangers of a social explosion are forcing the government to seek a way to divert anger.
Just a few hours before the bomb exploded in the metro, the authorities restricted the freedom of travel for opposition politicians and two of the most visited internet sites were blocked. Thirteen people died in the blast, a further 21 were seriously wounded. Two hours later, the investigation by detectives and explosive experts began, and yet 40 minutes later, before the completion of the forensic investigation, Lukashenko and his young son, Nikolai turned up "to lay flowers".
Some are interpreting this as an indication that Lukashenko was confident there would be no more explosions. The visit has backfired on him. Belarussian television footage managed to show Lukashenko just reviewing debris, but in photos now distributed in the blogosphere, it appears that Lukashenko was wandering around amongst the bodies lying on the platform. This has been interpreted not only as a breach of all forensic rules but indicating that he felt there is no need for a genuine investigation.
Clearly there are suspicions that this is all a set up job by the regime. Nobody has forgotten the wave of kidnappings and murders of opposition figures and journalists carried out by special KGB hit squads in the nineties.
In particular, the stress laid by the regime on the arrested being "workers" is a further indication that the regime sees a force capable of threatening its existence and decided to strike the first blow. Dictators are quite capable of such cynical manoeuvres, as was demonstrated just recently in Egypt, when it was uncovered that Mubarak’s Interior Minister was involved in the bombing of the Coptic Church in Alexandria.
With no religious divide or conflict, such as that in the Caucuses to use, Lukashenko is using this attack to intimidate workers, to try and make them distrust each other, for the simple reason that a strike in any of Minsk’s factories could set the whole country aflame in a blaze of protests.
Two previous terrorist acts in September 2005 and July 2008 which remain unsolved were used by the regime to target leading opposition figures. No-one was charged.
The day after the recent bombing, the EU Strasbourg parliament was due to vote on a proposal to launch economic sanctions against Belarus in reaction to the bloody suppression of the protests following December’s election. These would just make the economic crisis even worse, cutting off the possibility for some of the country’s biggest factories to export their goods to the EU. As a result of the bomb attack, the decision was postponed.
The attack was further used as an excuse to step up restrictions on the internet. After all the Arab events have demonstrated how much of a threat it is to dictatorial regimes. But Lukashenko has also launched a crusade against all those who have weapons. He instructed Zaitzev, head of the KGB to: ’Put behind bars all those who you find have unregistered weapons, explosives, arms left over from the war". Clearly the Libyan scenario is also on his mind.
Bourgeois opposition impotent - and in prison!
Despite his attacks on the opposition, the only difference between Lukashenko and the pro-bourgeois opposition is over what form of democracy is required. They are also aiming to introduce the "free market". It is only a matter of time before the privatisation programme launched by Lukashenko will allow Russia to get the juiciest pieces. Europe and the US have their own problems to solve and at the moment, the easiest way to bring Belarus to its knees is to let the economic crisis play its course.
This terrorist act has strengthened Lukashaenko’s hand. It gives him a justification for tightening the screws, a mandate for suppressing protests and strikes. Moreover, Lukashenko has the means for organising such an attack through the KGB, which has a record of organising such dirty work for the President.
No confidence in the regime
Lukashenko is using this terrorist act to attempt to persuade workers to calmly accept his reforms so workers in Belarus should have no confidence in the current investigation. This brutal regime, which suppresses trade unions, murders its political opponents and journalists, should not be allowed to investigate this act, of which it is the only obvious beneficiary. Workers should not allow the regime to use such acts to divide and pacify them. The only answer to this act should be for unity of workers in a struggle against the mass redundancies being prepared, against privatisation and to bring the regime down.
We call for:
- An open investigation by democratically elected workers’ commissions into the crimes of the Lukashenko regime and the current bombings acts
- End to repression - all political prisoners should be freed
- Privatisation should cease. Renationalise industries and along with those plants still in state hands, introduce workers’ control and management
- No budget cuts. The repayments of debt to the international financial institutions should be stopped and the money used to invest in the country’s industry and infrastructure;
- All anti-worker, anti-trade union laws should be repealed
- No to EU sanctions and Russian interference in Belarus
- For the organisation of a mass movement of workers against Lukashenko’s criminal regime
- No confidence in the bourgeois opposition. For the convening of a democratic constituent assembly representing all layers of the working population. For the establishment of a majority workers’ government
- For the democratic planning of production and the economy in the interests of workers and the poor, for a democratic socialist Belarus, as part of a socialist federation of European socialist states, on a free and equal basis