Money wars in Belarus – Atlantic Council
In addition to applying a harsh crackdown on civil society activists and independent journalists, Belarusian dictator Alyaksandr Lukashenka is now also attacking their money.
Since the beginning of this year, Belarusian security forces have raided the homes or offices of journalists 107 times according to the Belarusian Association of Journalists. Since July 8 alone, 63 searches have been carried out and 33 journalists remain in jail.
The repression against NGOs and the media and the freezing of their accounts came just a few weeks after Lukashenka issued a decree giving the Belarusian National Bank extensive currency exchange powers.
According to the decree of July 9, the National Bank has the right to prohibit the sale and purchase of foreign currency, to confiscate euros and US dollars and unilaterally convert them into Belarusian rubles, and to restrict the rights of residents Belarusians to open and maintain foreign bank accounts. .
The powers would come into force in the event of a “threat to national security”, if foreign exchange reserves “fall below an allowable level” or in the event of “sharp fluctuations” in the Belarusian ruble exchange rate. The decree, which extends over a Lukashenka edict published in april 2021, does not provide details of these conditions, giving authorities broad powers to impose the currency restrictions at their own discretion.
The new monetary rules come as Western sanctions effectively cut Belarus off from Western capital markets and other key sources of foreign exchange income. But they also provide a political weapon that can be deployed against the opposition, civil society organizations and journalists.
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Lukashenka’s tactics with independent media and civic organizations, combining draconian crackdown with efforts to fund and bankrupt them, appear to mirror and mimic those of Vladimir Putin‘s regime in Russia. In addition to freezing the bank accounts of opposition organizations like the Alexei Navalny Anti-Corruption Foundation, the Kremlin is replacing have also filed frivolous lawsuits and courts have imposed questionable bills for services allegedly provided by restaurants and other businesses.
As Lukashenka stepped up efforts to fund the opposition in Belarus, opposition leader Sviatlana Tsikhanouskaya was in Washington urging the United States and the European Union to effectively bankrupt the authoritarian Lukashenka regime.
Tsikhanoskaya meet US Secretary of State Antony Blinken, National Security Advisor Jake Sullivan, USAID Director Samantha Power, members of Congress and other officials. She said she delivered a list in Blinken on July 19 of companies in the potash, petroleum, timber and steel sectors in Belarus that the opposition would like to see sanctioned.
In remarks to reporters, Tsikhanouskaya said the measures she is proposing, 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 the escalation of the existing Western sanctions regime against Lukashenka “will be a real blow to him, to change his behavior and release political prisoners.”
The Leader of the Opposition addressed the elephant in the room, appeal to Russia stop funding Lukashenka. But she also appeared to recognize that the Belarusian dictator’s isolation could push him deeper into Moscow’s arms, saying the relationship “at the moment is so close that the next step is loss of independence.” We understand that Lukashenko has to pay for the support of the Kremlin.
The evidence is mixed as to whether Western sanctions would have the effect of pushing Belarus deeper into Russia’s embrace or whether they would deter Russia from supporting Lukashenka.
In one 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 the journal Democratization who concluded that sanctions against Belarus between 2004 and 2016 strengthened Russia’s grip on the country. Lukashenka “doesn’t want to lose more autonomy to Russia, but he doesn’t want to lose power either. Faced with a difficult choice, he will appease Putin rather than the West, ”Drezner wrote.
It’s correct. But there is also evidence that the current Western sanctions are having a chilling effect on Russian support for Lukashenka. TASS posted on June 24 that Russian oil giants Rosneft and Surgutneftgaz had not reserved any pipeline volume for transporting oil to the Belarusian state refinery of Naftan, which is subject to US sanctions, for the third quarter of 2021.
Reuters reported in May, citing unidentified sources, that “Russian oil exporters may suspend supplies to the Naftan refinery in Belarus” due to US sanctions. According to the report, “the Russians Rosneft and Surgutneftegaz do not plan to supply oil to Naftan in May” because they “fear being penalized if they continue to deal with Belarusian companies”.
The Belarus Money Wars look like a complex, multidimensional chess game with multiple moving parts. Lukashenka acts aggressively to finance the opposition and civil society. The opposition calls for tougher Western sanctions. And Russia is waiting behind the scenes while regularly expanding its footprint with its small neighbor to the West.
To thread this difficult needle, Western policy must view the sanctions against Belarus and Russia as part of a cohesive whole. As I have argued in this space, as long as Putin continues to allow and fund Belarus, the United States and its allies must sanction the autocratic Putin-Lukashenka axis as a unit.
Brian Whitmore is a non-resident Principal Investigator at the Eurasia Center at the Atlantic Council, Adjunct Adjunct Professor at the University of Texas at Arlington, and host of The Power Vertical Podcast.
The opinions expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff or its supporters.
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