Belarus and Greece: The Tale of Two Bailouts

Posted June 27th, 2011 at 8:52 pm (UTC+0)
5 comments

Greece and Belarus are two largely Orthodox Christian nations in Central Europe. Both have roughly the same size populations. And both, according to international bond ratings agencies, are now virtually bankrupt.

Over the last year, European Union officials have labored to persuade Greece to accept a $161 billion aid package under International Monetary Fund supervision. Greek politicians have hemmed and hawed. This month, as many as 500,000 Greeks at one time took to the streets to protest IMF conditions. (In Athens, a favorite anti-IMF rallying cry refers to the New
York hotel incident involving former IMF chief Dominique Strauss-Kahn: “The maid resisted. What do we do?”)

Greeks protest conditions attached to IMF administered European Union loan bailout of $161 billion, or $14,250 per inhabitant. (AP Photo/Thanassis Stavrakis)

Contrast that to Belarus.

For almost a year, Belarus President Alexander Lukashenko has asked for $8 billion in aid from Russia, his partner in a customs union.

Last week, the check finally arrived — for $800 million. (And $42 million of that was to come straight back to Moscow to pay Belarus’ overdue electricity bill. This money did not come back, and Moscow turned off the power on June 29).

And like any good banker, the Kremlin tied the loan to property that can be seized. In this case, the aid money is tied to Russian negotiations to take over 100 percent control of Soviet-era pipelines that carry Russian gas to Western Europe.

On Friday in Minsk, Martin Raiser, the World Bank Country Director for
Ukraine, Belarus and Moldova, saw no reason for hand holding. At the conclusion of a three-day visit to Belarus, he told reporters: “Notwithstanding the social achievements of the past, Belarus’s economic model has run out of steam.”

The IMF is equally cool to Belarus.

In early June, Belarus asked the IMF for $8 billion in aid. This money would follow $3.5 billion that the fund provided in 2009-2010. Many economists say President Lukashenko squandered most of this money on boosting salaries and pensions, trying to buy the December 2010 presidential elections.

Chris Jarvis, the head of the IMF team in Belarus, recently told reporters in Minsk that any new aid would be contingent upon “a strong program” to restructure Belarus’s state-dominated economy. He warned: “We would also have to be sure that all actors — the president, government, and national bank — are committed to that program.”

This prompted Bloomberg to headline: “Lukashenka Must Choose Between Belarus Control or IMF Aid.”

Hoping to prolong his 17-year stay in power, Lukashenko now is preparing to sell what many Belarussians call “the family silver” – the rent-producing gas lines and Belaruskali, a state-owned potash giant that brings in about $1 billion a year in revenue to the treasury. In a recent rambling five-hour “press conference,” Lukashenko tried to soften up public opinion, saying that Belaruskali,, the nation’s largest enterprise, should not be made “into a Holy Grail.”

If the Belarusian president meets his goal of selling this fertilizer giant for $30 billion, he could keep the “Belarus miracle” afloat for a few more years.

Given Belarus’ near total isolation, this may be the only route open to Lukashenko.

European taxpayers are prepared to lend Greece $14,250 for each Greek man, woman and child. In contrast, Russia’s aid to Belarus amounts to $84 per person.

A demonstrator confronts riot police near the Greek parliament in Athens, on June 15. Tens of thousands of grassroot activists and unionists converged on Athens' central Constitution Square as Prime Minister George Papandreou prepared to push through a new five-year campaign of tax hikes, spending cuts and selloffs of state property to continue receiving aid from the European Union and International Monetary Fund and avoid default. REUTERS/Pascal Rossignol

The difference boils down two intangibles that economists like to talk about: goodwill and brand.

Europe loves Greece because they love to go on vacation there. In 2008, 16 million tourists visited Greece, the vast majority visa-free.

In contrast, a visa to Belarus costs around $150 and is only issued with an invitation from an accredited organization within Belarus. At last count, Belarus ranked in 161st place worldwide for receiving foreign visitors – 91,000 in 2008.

When I came here last December, there were no taxis at Minsk airport. I felt I had flown into a Slavic North Korea. Finally, after 45 minutes standing in the snow, I shared a cab into town with a nice young man from Lebanon who was here to meet his internet bride.

Then there is the brand issue.

Ancient Greece, as everyone knows, was the cradle of democracy. Today, modern Greeks sing a national anthem called ‘Hymn to Liberty.”

Belarus has a very different brand.

In April 2005, then Secretary of State Condoleezza Rice on a visit to Moscow and Lithuania sought to help reporters put neighboring Belarus into perspective. She said that under Lukashenko, Belarus “is really the last dictatorship in the center of Europe.”

The Bush administration has come and gone. But “the last dictatorship in Europe” label has stuck to Lukashenko like a wet leaf on his shoe. He just can’t shake it.

Not that he tries very hard. On Wednesday evening, his black shirted riot police were filmed physically throwing young men and women face down onto the steel floors of prison trucks.

Belarussian policemen detain a photographer in central Minsk on June 22, one of 16 journalists attacked and detained by police at the 'silent

Their crime: walking on sidewalks in downtown Minsk and clapping their hands.

Police also detained 16 journalists, breaking their equipment in the process. The Swedish Foreign Ministry complained that police manhandled and briefly detained their charge d’affaires, who was observing the protest.

Only days earlier, Swedish Foreign Minister Carl Bildt had appealed for European attention to the economic plight of Belarus.

“We are, of course, focusing on the situation in Greece. We are all worried
about that,” Bildt said. “But Belarus might be even worse in terms of financial collapse.”

Don’t hold your breath waiting for Washington, Brussels or Stockholm to approve an IMF bailout for Lukashenko’s Belarus.
— Follow me on Twitter @VOA_Moscow

James Brooke
James Brooke is the Russia/CIS bureau chief for Voice of America. A lifelong journalist, he covered West Africa, Brazil, the American Rocky Mountain States, Canada, and Japan/Korea for The New York Times. A resident of Moscow since 2006, he was first Bloomberg bureau chief for the region. In 2010, he joined VOA. In addition to writing Russia Watch, his weekly blog, he also does video, radio and web reports from Russia and the former USSR.

5 responses to “Belarus and Greece: The Tale of Two Bailouts”

  1. Siarhiej says:

    Right now I am watching tanks moving on the main street, Independence ave, in Minsk. Deep in night they are training for parade. Lukashenko has enough money for military parades. Do not give him money, if you do, he spend them for riot police salary or parades.

  2. Gennady says:

    The vivid picture of perished Belorussia and sufferings of millions of great Byelorussian people under Lukashenko has bad, omen implications for Russia.
    Byelorussia has already passed the moment of no return with unlucky Lukashenko having no gas and oil pipeline.
    The same will happen with Russian people in a not distant future once the country has run out of natural gas and oil.
    Both authoritarian rules (I mean Lukashenko and PM Putin) are “twins” by their political convictions (illusions ?) and lack of skills of how to govern in democratic and law-abiding environment, how to introduce innovations, to run science, technology, education and health care.
    The only difference between the two is that until now PM Putin enjoys unquestionable support of FSB and special services (being lavishly funded with petrodollars) and gas and oil pipelines. But they aren’t eternal.

  3. Pyotr says:

    Russians are like kids riding a tabogan for the first time. They believed Putin it would be fun and it really is for now. Putin is encouraging constantly “Enjoy the ride! It is fun as I said, isnt it?!” But the kids dont see or may be dont want to see the cliff which the slope is ending with. Sad story and the end is soon. Belarussians are on the cliff’s edge already, we are approaching it.

  4. A kleptocracy is a Kleptocracy, the political veneer may be different, but the outcome is the same-the theft of the human commons, including the labor, the property, the earth’s abundance itself, all for the benefit of the top 1% of the economic criminal class. The difference is in perception only (thanks to propaganda)-if a country has a nominal “representative republic”, then the theft, done by banksters, is “sold” as an economic theory that is incontrovertible, “the invisible hand”, “the market”, etc., aided by “trickle down” and “Austerian” language. In a more “authoritarian” government, whether a nominal dictatorship, or a “controlled economy” like a communistic government, there is no need for a “cover story”-the theft is in the open, no need for a moralist description, just a mechanical one, and the oucome is the same. When the peoples of the world realize that the resources of our planet are quite enough to support a sustainable, healthy life for everyone, it’s the distribution and the waste, greed, and plunder of our so-called elites that are causing so much misery, the reaction will be memorable, and I see Greece, Spain, England, and others coming to that point.

About

About

James Brooke is VOA Moscow bureau chief, covering Russia and the former USSR. With The New York Times, he worked as a foreign correspondent in Africa, Latin America, Canada and Japan/Koreas. He studied Russian in college during the Brezhnev years, first visited Moscow as a reporter during the final months of Gorbachev, and then came back for reporting forays during the Yeltsin and early Putin years. In 2006, he moved to Moscow to report for Bloomberg. He joined VOA in Moscow in 2010. Follow Jim on Twitter @VOA_Moscow.

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