|Powerful Belarusan leader with one foot in the Soviet past
By Stefan Wagstyl
Published: July 30 2004 5:00 | Last Updated: July 30 2004 5:00
It is evening in a bar on the shores of a small lake and the lights dance on the water. The terraces are crowded with drinkers taking in the views and the sounds of a jazz band. The talk is of family and friends, work and foreign travel.
Welcome to Minsk, capital of the former Soviet republic of Belarus, Europe's last communist dictatorship. Five years ago, President Aleksander Lukashenko's country seemed to be disappearing down an economic black hole following the 1998 financial crisis in neighbouring Russia.
The street lights went out early to save electricity and the hotels were struggling to secure food for breakfast. Today, Minsk is bright with neon signs and the restaurants serve everything from steak to sushi. "Minsk looks better than Warsaw," says Sergei Kostyuchenko, chairman of Priorbank, the only large non-state bank. But not everything is as it seems. Everyday life may no longer be as grim as it was in Minsk, but it remains dreary outside the capital, especially in the shoddy concrete blocks that are home to most Belarusans.
And after 10 years in office, Mr Lukashenko's grip on political life is as tight as ever. Opposition politicians say conditions have deteriorated since the last presidential elections in 2001, with Mr Lukashenko now working to ensure success in parliamentary elections due this autumn and presidential polls planned for 2006.
The European Union's eastward enlargement to Belarus's western border this year has so far done nothing to encourage Mr Lukashenko to pay more attention to western criticisms of his rule. His eyes remain firmly fixed on Russia.
Mr Lukashenko's officials argue that the country's record justifies his hardline policies. Pointing at Russia, they say rapid liberalisation produced corruption and chaos. They add that President Vladimir Putin's efforts to reimpose order prove Mr Lukashenko's slow approach to reform was correct. Sergei Paimtsev, a pro-Lukashenko businessman, says: "Lukashenko has done all the time what Putin is doing only now."
The European Bank for Reconstruction and Development, the region's multilateral bank, ranks Belarus among the least liberal economies in the former Soviet Union with 75 per cent of output still in state hands.
Sprawling state-owned factories such as the Minsk Tractor Plant, with more than 20,000 employees, dominate industry. State-owned farms still run the countryside. Mr Lukashenko often talks of reform but his decisions are contradictory. This year, for example, the government increased its influence by assuming rights to block big decisions at any company in which the state had ever had a stake.
The International Monetary Fund has repeatedly questioned whether economic growth is sustainable and urged Minsk to pursue market-oriented reforms.
Mr Lukashenko's answer is that the IMF has been wrong so far. In contrast to the upheavals in Russia, economic output has grown consistently for a decade, including, says the government, a 6.8 per cent increase last year.
The IMF says the correct figure is closer to 4.8 per cent, but concedes that even at this lower level the performance is "solid". The population of 10m is hardly rich, but in comparison with most of the former Soviet Union poverty is low and education and health standards are good.
However, these results are possible only with outside support. Russia subsidises Belarus by supplying gas at cut-price rates and buying 50 per cent of Belarusan exports, including low-quality industrial goods that might not sell elsewhere. Also, an estimated 300,000 Belarusans work abroad, chiefly in Russia and Poland, and send their money home mostly in cash to avoid heavy Belarusan taxes.
Mr Lukashenko ensures there is little public criticism of his rule. Opposition leaders say they are constantly under pressure from the secret police, which has retained its Soviet-era name of KGB.
The Organisation for Security and Co-operation in Europe has regularly asked for the full investigation of the disappearance in 1999-2000 of several politically prominent people, including Viktor Gonchar, a popular opposition leader, and TV journalist Andrei Zavadski.
Human rights activists say that while there have been no new disappearances other forms of pressure have increased, including politically-inspired arrests and court actions. Sergei Martynov, the foreign minister, denies this, saying that singling out Belarus for criticism over human rights is not justified.
Outside Minsk and a few western cities, where Polish influence is strong, Mr Lukashenko remains popular. Among the sentiments he exploits is widespread nostalgia for the former Soviet Union.
While educated young people want to join the EU, many older citizens dream of unification with Russia. Mr Lukashenko has signed up to an economic union with Ru