In Belarus, a Parasite Tax Saps the President's Strength

8 MINS READMar 22, 2017 | 09:00 GMT
In Belarus, President Aleksandr Lukashenko Parasite Tax Saps his strength
The geographic spread of the Belarusian protests has amplified their impact, and larger demonstrations are planned for March 25.
Forecast Highlights

  • The Belarusian government will face wider demonstrations against the "social parasite tax" if it does not change its stance on the unpopular policy.
  • The protests, coupled with deteriorating economic conditions and worsening tensions with Russia, will pose the greatest challenge President Aleksandr Lukashenko has ever encountered in over two decades in power.
  • How the government in Minsk chooses to deal with the approaching protests — and with political dissent and national security more broadly — will therefore be a key test of the stability of the embattled leader's rule.

Things are not going well for the Belarusian government. The country's economy has sunk into a malaise that it cannot seem to recover from, and Minsk's relationship with its longtime ally, Russia, is on the rocks. To make matters worse, one of the longest and most widespread protest movements in Belarus' post-Soviet history has arisen over the past month — unrest that is likely to only deepen if President Aleksandr Lukashenko refuses to walk back his unpopular "social parasite tax."

A Drain on the Government's Coffers

The Belarusian economy has been stuck in a recession for more than two years, thanks in large part to its close ties to Russia's own foundering economy. When oil prices plunged in 2014, not long after the West slapped sanctions on Russia for its role in the eastern Ukraine conflict, the Russian economy entered a downward slide that it has yet to reverse. Because Belarus relies on Russia for much of its trade, investment and energy imports, its economy was dragged down with Russia's, and in 2015, Belarus' gross domestic product contracted by 3.9 percent before shrinking again by an estimated 3 percent in 2016.

Belarus GDP Growth

Belarus' heavy dependence on its flagging foreign partner forced Minsk to adjust its strategy abroad. Lukashenko, fearing the West might seek to replicate the 2014 Euromaidan uprising in Ukraine by inciting similar protests within Belarus' borders, began to thaw his country's relations with the United States and Europe. And in many ways, his efforts paid off: The European Union suspended most of its sanctions against Belarus in 2015, and Minsk began to forge closer trade ties with Western countries to supplement its fading relationship with the struggling Russian economy. Belarus even managed to secure a position mediating between East and West as the Ukraine conflict dragged on.

Belarus Exports to Russia

Though this strategy eased the political pressure building on Belarus from the West, it also worsened tension between Minsk and Moscow. Despite their long-standing alliance, Belarus and Russia have a relationship prone to diplomatic spats over economic and energy issues, and in 2016 those grievances flared once again. The two countries became embroiled in a dispute about natural gas prices and transit fees that has taken a toll on the Belarusian economy in the months since. So far Russia has refused to budge on its price hike, and Belarus' budding ties with the West are still too new to provide it with any sort of meaningful relief.

Shifting the Burden

It was within this context that the Belarusian government enacted its controversial "social parasite tax." The deeply unpopular measure imposes a fee of 460 rubles (about $250) on working-age citizens with no formal source of income. The reasons given for the presidential decree — which was signed in April 2015 but did not require payments to be made until February 2017 — were that Belarusian citizens should do more to offset the weak economic environment, and that gray and black market activity needed to be combated. When the tax's February implementation date arrived, around 400,000 people began receiving fines from the government for failing to pay the fee as ordered.

To some people, $250 may not seem like much, but in a country where the average monthly salary stands at $380, it can be a sizable sum. Incomes in Belarus, moreover, have fallen from an average of $7,500 a year in 2014 to about $4,000 a year now. Straining to make ends meet, Belarusian activists started collecting signatures on Jan. 18 to petition the government to abolish the tax. When Minsk stood its ground, they began to call for protests instead.

Those calls were answered on Feb. 17 when some 2,000 people took to the streets of Minsk to protest the tax. Two days later, several hundred people demonstrated in the cities of Gomel, Mogilev, Vitebsk and Brest. Though these numbers are small, the protests' geographic spread amplified their impact, and they continued into early March. After weeks of persistent unrest, Lukashenko declared March 9 that the tax would not be collected for another year.

Coming from a leader who has ruled his country with an iron grip since 1994, the concession was certainly notable. Lukashenko's administration, after all, has traditionally taken a much harder stance on public demonstrations, though this attitude has softened somewhat as Minsk has improved its ties with the West. In fact, over the past year the Belarusian government has stopped detaining participants in unsanctioned protests, opting to punish them with fines rather than jail time. This newfound lenience, however, has not held firm during the country's more recent protests. At first demonstrators were charged only for joining in unsanctioned protests, but toward the beginning of March, dozens of them — along with the journalists covering the events — were arrested. Belarusian police then raided a local office of the opposition coalition in Vitebsk on March 7. Nevertheless, bouts of unrest have continued to crop up across the country: Hundreds of people demonstrated in smaller towns such as Pinsk and Slonim on March 10 and March 19, while large rallies were held in Minsk, Grodno and Mogilev on March 15 (Belarus' Constitution Day).

So, the Belarusian government has found itself in a difficult position. After allowing and even sanctioning several protests as part of political reforms undertaken to appease the West, Minsk has reverted back to the heavy-handed approach it has relied on for much of its history. And despite Lukashenko's attempts to both placate and intimidate protesters, the demonstrations show no sign of abating as the public prepares for another round of large rallies scheduled for March 25.

Feeding Another Uprising?

Belarus' burgeoning protest movement has given rise to speculation in the media that another Euromaidan-style uprising is in the making. But there are several differences between 2014 Ukraine and today's Belarus to bear in mind. For one, Belarus' protests started because of Minsk's domestic policies, not its foreign alliances. For another, Belarus does not boast a substantial base of Western sympathizers, whether in formal political parties or among the broader public. In fact, the government's gradual opening to the West pales in comparison with the deep integration Ukraine pursued — and abruptly abandoned — with the European Union. So although some pro-Western opposition parties in Belarus have tried to translate the protests into a popular mandate, they have largely failed; instead, the demonstrations have continued to arise organically among Belarusian citizens. (In that sense, Belarus' protests may more closely resemble demonstrations that swept through Russia in the wake of its contested parliamentary elections in 2011.)

Even so, the latest unrest is similar to the Euromaidan revolution in one crucial way: Over the past month, protests have taken on an anti-government tone in place of the narrower anti-tax message they began with. This has given Lukashenko less room to maneuver, since additional crackdowns would risk fueling the protests' spread in the months ahead. Backed into a corner, the president accused the West of using a "fifth column" of individuals embedded within the country to stoke unrest, announcing on March 21 that security forces had apprehended dozens of militants planning to launch an "armed provocation." The allegations, if true, would be quite serious. But Lukashenko has every reason to exaggerate threats to the country's national security in order to justify harsh measures meant to impose order.

Meanwhile, the question of the Kremlin's position on — or perhaps involvement in — the protests remains unanswered. Russia's repeated clashes with Lukashenko have certainly frustrated Moscow, even leading to the reinstatement of border controls after Belarus relaxed its visa policies toward Western countries in January. For all of their problems, though, the two countries remain strategically aligned and have stepped up their cooperation on security matters in recent months. Though Russia could no doubt put pressure on Lukashenko by meddling in the protests, the last thing Moscow wants is a Belarusian uprising that calls into question the country's stability and foreign policy.

Belarus' current predicament, then, seems to be a mostly domestic one — at least for now. Throughout more than two decades in office, Lukashenko has proved adept at balancing the country's political actors, just as he has balanced between Russia and the West. But he may be facing his biggest challenge yet, and how the embattled leader chooses to deal with the impending protests will affect his ability to stay in power for years to come.

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