February 17, 2025 –
Zuzanna Kalinowska
–
Articles and Commentary
Alyaksandr Lukashenka speeking in Minsk on September 17th, 2023. Photo: Shutterstock
Alyaksandr Lukashenka, having been named “Europe’s last dictator”, has been steadily consolidating his executive power for years, marking 2024 as the third decade in which he has been the head of state. It is interesting to analyze how Lukashenka has sustained his autocratic, Soviet-style rule so long following the dissolution of the Soviet Union in 1991. Indeed, Belarus’s specific geographical location, between the democratic European Union and authoritarian Russia, makes it subject to scrutiny by both. Putin views Minsk as a strategic partner, whereas the EU considers Belarus as a significant problem to its east. Lukashenka has also ramped up the pressure on society following the 2020 mass protests by enforcing widespread repression. Belarus is the country in which, unlike countries in the eastern neighborhood like Poland, Lithuania and Latvia, there were no attempts to enact a post-communist transition at all. In the European landscape, the political economy of Belarus has become a central issue for geopolitical stability. Thus, it is of great importance to keep the case of Belarusian autocracy at the top of the international agenda.
Many studies have revealed that democracies are under siege worldwide and this trend continues to persist. Clearly, the erosion of democracy is evident in Europe. Using economic freedom data, Belarus’s score is 48.4, ranking its economy 153rd out of 184 countries in 2024. This undoubtedly demonstrates that autocracy limits the capacity for economic development. On average, autocracies tend to perform worse than democracies in terms of economic growth. Consequently, there has been growing interest in examining the relationship between democracy and economic development.
Lukashenka’s regime does not provide freedom or a decent standard of living for people, leading to an expanding Belarusian diaspora. Approximately 1.5 million Belarusians reside abroad, a notable number considering Belarus’s population is just under 9.5 million. Unable to influence the situation inside Belarus, the opposition is looking for ways to help their country from outside. The EU and its member states help to support civil society, promoting democracy and addressing humanitarian needs by providing various forms of assistance to Belarus.
In fact, there is a strong synergy between economic and political institutions. According to Acemoglu and Robinson, political institutions play a key role in economic prosperity. They classify political institutions as extractive when they limit society’s role in ensuring an efficient state. The failure of either pluralism or political centralization creates room for extractive institutions, making Belarus vulnerable to economic crises. That being said, it allows Lukashenka to strengthen his unique political system known as “state capitalism”.
In the third decade of Lukashenka’s regime, widespread public dissatisfaction has been observed, signalling a significant erosion of his authority. Lukashenka’s strategy confirms that imprisoning those who voice dissent is insufficient to maintaining control over the state. In addition to suppressing independent media, civic organizations, and political parties that the government deems “oppositional”, society as a whole has been fully repressed by Minsk. Under Lukashenka’s regime, there is no place for independent judges and courts. He has been weakening the judiciary and flouting the rule of law. At the same time, a highly politicized economy has, in fact, reached its limits.
First and foremost, Lukashenka’s economic model is characterized by strong state dominance, completely rejecting privatization. According to various estimates, state-owned enterprises make up around 55 per cent of GDP. The dominance of state ownership limits the capacity to operate internationally. Lukashenka has always been a fan of Soviet-style economic governance. He never undertook any market reforms, maintaining central planning in the spirit of the Soviet past. While his neighbours pursued political and economic liberalization, Belarus has never aspired to pursue a post-communist transition. Surprisingly, the Belarusian economy has been doing generally well. According to the Vienna Institute for International Economic Studies, Belarus had substantially higher gross domestic product (GDP) per capita at purchasing power parity (PPP) in 2022 – 14,520 euros – than Ukraine (9,030 euros) and Moldova (9,860 euros).
It is also noteworthy that the rapid growth of Belarus’s IT sector was a success for nearly two decades. Neither COVID-19 nor western sanctions following the disputed 2020 election stopped its expansion. However, Belarus’s involvement in Russia’s 2022 invasion of Ukraine accelerated the emigration of IT specialists and company relocations, leading to a sharp decline in growth. By 2023, the sector’s share of GDP fell from six per cent in 2021 to three per cent, with export value dropping from 3.2 billion to 1.8 billion US dollars. Lukashenka’s neo-totalitarian regime and aggression have significantly halted the positive trend of the growing importance of the IT sector in the Belarusian economy, which served as an alternative area of growth. This helped to place Belarus in 19th out of 23 countries in the Emerging Europe IT Competitiveness Index.
However, after years of prominent and strong economic growth, Belarus started to experience the hurdles of sanctions. According to Statista Belarus, GDP growth reached -4.7 per cent in 2022. The downward trend has persisted, with rates of 3.93 and 3.58 per cent recorded in 2023 and 2024 respectively, with a forecasted 2.3 per cent for 2025. Throughout Lukashenka’s rule, the country has only experienced short-term gains, primarily supported by Russia. However, a high level of development has remained out of reach, as the political elite has concentrated its efforts on financing the apparatus of repression and propaganda. The situation in Belarus has not got any better after 2022, when Belarus became a co-aggressor country. Supporting the Russian invasion of Ukraine made Belarus the subject of western sanctions, shutting down alternatives to international trade. Involvement in the conflict has brought major economic consequences. Importantly, Belarus lost access to the Ukrainian market. According to various estimates, total exports to the EU dropped by around 52 per cent in 2022, while imports dropped by 15 per cent.
In hoping to sustain economic growth, the reorientation of export routes has become pivotal for Lukashenka’s administration. Belarus is breaking international isolation by expanding its trade partners in the Global South and cultivating stronger ties with China. Although adjusting to western sectoral sanctions takes time, it has been reported that mutual trade turnover with China has risen, making it the second-largest trade partner after Russia. According to the Ministry of Foreign Affairs of Belarus, the growth of exports to so-called “friendly countries” exceeded the losses of exports to the West and Ukraine by 1.8 billion US dollars in 2023. Yet, with economic integration with European neighbours unlikely in the foreseeable future, any long-term growth outlook remains uncertain.
Importantly, deepening the bilateral partnership with Russia has been a critical point for Minsk’s diplomatic strategy. Putin has been an external protector for many years. Apparently, he has been providing Belarus with all sorts of support. Besides, he openly announced his willingness to help Belarus with restrictive sanctions. As far as trade is concerned, Russia absorbed most of what Belarus used to export to Ukraine. This means that Belarusian exports to Russia grew by 50 per cent in 2022 compared to the previous year, with agricultural product exports rising by 70 per cent. Belarusian officials do not seem preoccupied with the possible threat of overdependency on the Russian market. However, the major problem is that Belarusian statistics are heavily skewed and it is not possible to establish the exact pattern of Belarusian-Russian exchanges as the data remains closed.
Alyaksandr Lukashenka relies in large part on his ties to Russia and the support from its funds. Putin is seen as the greatest supporter of the survival of Lukashenka’s regime. Belarus has become Moscow’s most loyal ally and has been filling some holes in the Russian market vacated by western companies. This way, Russia has been gradually taking control of the Belarusian economy, from almost absolute dependence on Russian resources to constant subsidies. The list is long enough. The leading role of Putin in the Russian-Belarusian friendship has expanded to a great degree. At one point Vladimir Putin even suggested the incorporation of Belarus into Russia as a solution to Minsk’s growing economic difficulties. Whether Lukashenka and his entourage ever considered what price Belarus would pay for Russian “help” remains unknown.
Above all, the Belarusian regime is the best example of a modern pure autocracy. Perhaps not surprisingly, in 2005 the US Secretary of State Condoleezza Rice labelled Belarus as “the last remaining true dictatorship in the heart of Europe”. The outdated and inefficient economy makes the prospect of “Europeanization” even more than doubtful in the foreseeable future. As Lukashenka’s power continues to be consolidated and expanded, with little regard for the socio-economic damage to both his country and Europe, Belarus’s economic prosperity has been gradually deteriorating, highlighting the need for structural reforms. To summarize, the situation in Belarus is crucial for Europe’s economic and political stability. Lukashenka’s strategy demonstrates the gradual erosion of the condition of the Belarusian economy, prompting Europe to take proper action, including keeping an eye on Lukashenka’s regime and supporting Belarusians striving for positive change in their country.
Zuzanna Kalinowska is studying Economics at Tilburg University and working as an assistant to the Economic and Trade Section at the Permanent Representation of Poland to the EU in Brussels.
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Alyaksandr Lukashenka, belarus, Belarusian economy
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Publish date : 2025-02-16 16:00:00
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