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The cost of a police state: Belarus’s economic problems. OSW Commentary Number 392 11.05.2021.

Kłysiński, Kamil (2021) The cost of a police state: Belarus’s economic problems. OSW Commentary Number 392 11.05.2021. [Policy Paper]

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    Although the COVID-19 pandemic did trigger a recession in Belarus, the greatest blow to the country’s economy has been its deep political crisis. This was caused by the authorities rigging the results of the presidential election, which in turn provoked mass opposition from the citizens. Alyaksandr Lukashenka, focused on remaining in power, resorted to unprecedented repression, which over the following months completely shattered many years of efforts to improve the investment climate and to achieve a partial liberalisation of the economy. These efforts included a flagship initiative to develop the Belarusian IT sector. 2020 revealed the Belarusian economy’s great sensitivity to the global economic slump and the regime’s inability to launch free-market reforms. As a consequence, although in 2020 Belarus’s GDP fell just 0.9%, the country found itself in an extremely difficult situation due to the magnitude of other threats to its economic stability. Belarus’s inability to effectively refinance its foreign debt using funds offered by Western institutions, its significant budget deficit (approximating the level recorded in the crisis years of the 1990s) and the state sector’s largely unpayable debt to the local banks will all result in continued aggravation of the economic crisis. Alongside this, they will provoke a rise in Russia’s importance as the only ally and lender to an internationally isolated Belarus. Without Russia’s assistance, the risk of the Belarusian economy collapsing will increase significantly in 2021.

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    Item Type: Policy Paper
    Subjects for non-EU documents: Countries > Russia
    Countries > Belarus
    EU policies and themes > Policies & related activities > economic and financial affairs > economic growth
    EU policies and themes > Policies & related activities > political affairs > democracy/democratic deficit
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for Eastern Studies (OSW) > OSW Commentary
    Depositing User: Daniel Pennell
    Official EU Document: No
    Language: English
    Date Deposited: 09 Feb 2022 12:01
    Number of Pages: 7
    Last Modified: 09 Feb 2022 12:01

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