Money wars in Belarus – Atlantic Council
Belarusian dictator Alyaksandr Lukashenka not only cracked down on civil society activists and independent journalists, but also on their money.
Since the beginning of this year, Belarusian law enforcement agencies have searched journalists’ homes or offices 107 times, according to the Belarusian Union of Journalists. Since July 8th alone, 63 raids have been carried out and 33 journalists are still detained.
And this week, the bank accounts of at least three civic organizations (the Belarusian Association of Journalists, the Imena Charitable Foundation and the Belarusian PEN Center) have been blocked.
The crackdown on NGOs and media, and the freezing of their accounts, came just weeks after Lukashenka issued a decree that gave the Belarusian National Bank far-reaching powers over currency exchange.
According to the decree of July 9, the National Bank has the right to prohibit the sale and purchase of foreign currencies, seize euros and US dollars and convert them unilaterally into Belarusian rubles, and restrict the right of Belarusian residents to open and operate foreign bank accounts .
The powers would come into effect in the event of a “threat to national security”, if foreign exchange reserves “fall below an acceptable level” or in the event of “sharp fluctuations” in the exchange rate of the Belarusian ruble. The decree, which extends an Edict Lukashenka of April 2021, does not contain details of these conditions and gives the authorities extensive powers to impose the currency restrictions at their own discretion.
The new currency rules come as Western sanctions have effectively cut Belarus off from Western capital markets and other major foreign exchange revenues. But they are also a political weapon that can be used against the opposition, civil society organizations and journalists.
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Lukashenka’s tactics with independent media and civic organizations, which combined a draconian raid with payoff and bankruptcy efforts, appear to mirror and emulate the tactics of Vladimir Putin’s regime in Russia. In addition to freezing the bank accounts of opposition organizations such as the Alexei Navalny Anti-Corruption Foundation, Kremlin deputies have filed frivolous lawsuits and courts enforced dubious bills for services allegedly provided by restaurants and other businesses.
When Lukashenka escalated his efforts to weaken the opposition in Belarus, opposition leader Sviatlana Tsikhanouskaya was in Washington to urge the United States and the European Union to effectively bankrupt Lukashenka’s authoritarian regime.
Tsikhanouskaya met with US Secretary of State Antony Blinken, National Security Advisor Jake Sullivan, USAID Director Samantha Power, members of Congress and other officials. She said she gave Blinken on July 19 a list of companies in the Belarusian potash, oil, wood and steel sectors that the opposition would like to see sanctioned.
In comments to reporters, Tsikhanouskaya said the measures she proposed, including sanctions against potash producer Belaruskali, would go beyond existing US and EU sanctions. “I think it is high time for democratic countries to unite and show their teeth,” she said at an event hosted by the Atlantic Council.
Speaking to reporters, Tsikhanouskaya said that the escalation of the existing Western sanctions regime against Lukashenka “will be a real blow to get him to change his behavior and release political prisoners”.
The opposition leader turned to the elephant in the room and asked Russia to stop funding Lukashenka. But she also seemed to recognize that the Belarusian dictator’s isolation could drive him deeper into Moscow’s arms, saying that the relationship “is so close at the moment that the next step is loss of independence. We understand that Lukashenko has to pay to support the Kremlin. ”
The evidence as to whether Western sanctions would drive Belarus deeper into Russia’s embrace or prevent Russia from supporting Lukashenka is mixed.
In a column for the Washington Post this week, Daniel Drezner, professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University, quoted a 2019 article in Democratization that concluded that the sanctions were in place against Belarus between 2004-16 Russia’s country under control. Lukashenka “does not want Russia to lose any further autonomy, but neither does it want to lose power. When faced with a difficult decision, he is more likely to appease Putin than the West, ”wrote Drezner.
That’s right. But there is also evidence that the current Western sanctions are having a deterrent effect on Russian support for Lukashenka. TASS reported on June 24 that Russian oil giants Rosneft and Surgutneftgaz had not reserved pipeline volumes for the third quarter of 2021 to transport oil to the US-sanctioned state-owned naftan refinery in Belarus.
Reuters reported in May, citing unidentified sources, that “Russian oil exporters could stop deliveries to the Belarusian naftan refinery due to US sanctions”. According to the report, “Russia’s Rosneft and Surgutneftegaz are not planning to deliver oil to Naftan in May” because they “fear that if they continue to do business with Belarusian companies they could be punished.”
The money wars in Belarus resemble a complex multi-dimensional chess game with several moving parts. Lukashenka is aggressively trying to expose the opposition and civil society. The opposition is calling for tougher western sanctions. And Russia is waiting in the wings as it continues to expand its footprint in its smaller western neighbor.
In order to thread this difficult needle, Western policy must view sanctions against Belarus and Russia as part of a coherent whole. As I have argued in this context, as long as Putin continues to enable and finance Belarus, the United States and its allies must sanction the Putin-Lukashenka axis of the autocrats as a unit.
Brian Whitmore is a Nonresident Senior Fellow at the Atlantic Council’s Eurasia Center, Adjunct Assistant Professor at the University of Texas at Arlington, and host of The Power Vertical Podcast.
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