Belarus election proves lost chance to improve relations with West

By bne IntelliNews September 24, 2012

Sergei Kuznetsov in Minsk -

Belarus' parliamentary elections on September 23 had a predictable result - the opposition did not win one seat in the 110-seat lower chamber. It seems that the new parliament will be much like the present one that was elected in 2008 - an institution that will rubber-stamp any presidential initiative without discussion.

According to Belarus' Central Election Committee, 109 MPs were elected on a turnout of 74.2%. This seems high, because the election campaign was listless and it appeared that the general public, especially in large cities, were not much interested. The only extraordinary move took place approximately a week prior to the election when Belarus' two main opposition parties - the United Civic Party and Belarusian People's Front - said they would boycott the elections and withdrew their candidates. The two parties said that the ballot could not be considered free and democratic, especially when many opposition activists remain political prisoners.

President Alexander Lukashenko condemned this move by the opposition parties. "I am coming to the conclusion of their complete inability as politicians," he told reporters after voting at a Minsk polling station.

Commenting on the possible reaction on the elections of the West, Lukashenko said that he "always hopes for the better," but the country was "conducting elections today not for the West, it is the Belarusian people that are front and centre during the elections."

Except the people play little role in the process. Reports say that a number of Belarusian opposition websites were blocked after they reported the results of the turnout for the elections have been falsified.

After the last presidential elections in December 2010, considered a sham by the West, and the subsequent mass arrests of opposition activists, the EU and the US imposed sanctions on Belarusian officials, businessmen and state-run enterprises. The US imposed sanctions against six large state-owned oil and chemical companies, including Naftan, one of the country's two oil refineries, due to the deteriorating human rights situation. The EU has imposed sanctions against several tycoons suspected of being close to the regime, as well as against more than 30 companies controlled by them.

Despite the boycott by the two main opposition parties, a number of other opposition candidates took part in the elections. Whether the Belarusian authorities allow any of them to become members of parliment in an attempt to improve relations with the EU and the US was the only uncertainty in these elections.

Belarusian authorities need this improvement in order to avoid further sanctions against their state-owned companies. According to a bne diplomatic source who did not want to be identified, the EU has taken a pause in the process of imposing sanctions until October. As such, the views of the 330 election monitors sent by the Organisation for Security and Cooperation in Europe (OSCE) will play a crucial role in deciding on further Western sanctions. And judging from their findings on the conduct of the elections that was issued on September 24, there is little for the government to celebrate.

The OSCE said many of its commitments on citizen's democratic rights to associate, to stand as candidates and to express themselves freely were not respected in the elections, which it concluded were not administered in an impartial manner and the complaints and appeals process did not guarantee effective remedy. "This election was not competitive from the start," said Matteo Mecacci, who led the short-term OSCE observer mission. "A free election depends on people being free to speak, organize and run for office, and we didn't see that in this campaign."

Money matters

The controversial elections took place against a backdrop of government's efforts to negotiate a new bailout loan from the International Monetary Fund (IMF), which would be used to help pay off the previous $3.6bn stand-by loan agreed in 2009. Nadezhda Ermakova, governor of the central bank, has told reporters repeatedly that she believes there could be problems getting the loan approved by the member states represented on the IMF Executive Board. According to Ermakova, some Western IMF member states "see more politics in Belarus than economics and partnership." It is safe to assume that Ermakova is referring primarily to the US and EU member states.

Minsk-based independent financial analyst Alexander Mukha tells bne that the Belarusian government needs to beef up its international reserves, which are still below the level equivalent to three months of import cover that's regarded by economists as necessary to maintain the stability of the domestic currency. "To start the second bailout IMF programme it is necessary to normalize political relations between Belarus and the EU, and to bring together positions on key issues of economic policy in Belarus. This includes balanced monetary and fiscal policies, the implementation of structural reforms, including the privatisation of state-owned assets," Mukha says.

As of September 1, the country's international reserves stood at $8.1bn. Belarus' government foreign debt repayments will peak in 2013-15 and the country will require about $3bn annually to repay earlier loans, including the IMF loan.

The IMF said in a report published in May that, "initiating new program negotiations would require consensus among the authorities on a strong and consistent stabilization and reform strategy".

"The authorities [of Belarus] have been doing most of the right things, but cannot commit to give up growth and wage targets that are inconsistent with stability. They are also ambivalent about the deep structural reform that would be needed. The staff believes that a new program must be sufficiently strong and credible to garner the support of the IMF's membership. Unequivocal commitment by all leading policymakers to strong program objectives would be an essential first step," the IMF underlined.

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