The never-ending transition

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The never-ending transition
In the USSR Belarus had a remarkably high level of social, economic development and a reputation for political stability.

After the collapse of the Soviet Union in 1991, however, Belarus has been experiencing a severe economic crisis. The decade that followed has been labelled a transition period, i.e. a complex transformation of the country from central planning to a market orientation. 

Transformation has not been a linear process. In recent years, Belarus’ economic development has been heavily influenced by the political regime.

The positive economic shifts of the early 1990s, along with the development of democracy, were later reversed when an ineffective administrative command economic system was introduced under Lukashenko.

In 1990 the Belarusian Supreme Soviet adopted a programme of economic transformation. This was largely based on the radical “500 days” programme developed by two Russian economists, Yavlinsky and Shatalin, at a time when a less liberal transformation programme, advocated by Gorbachev, had been adopted by the-then Soviet Government.

In 1994 a programme of strict economic measures was adopted, partially influenced by the neo-liberal outlook of the International Monetary Fund. Lukaskenko however brought a new heterodox vision of the transformation, since the options he favoured included a wide spectrum with elements of market socialism and state control of the economy.

Progress made in the early 1990s with the creation of market institutions was disregarded: under Lukashenko, no new private enterprises were started, a great number of the existing ones either collapsed or entered the black economy, and many Belarusian enterprises continued to function in the old Soviet style, meaning that state authorities gave them production plans.

According to the EBRD, Belarus is among the least reformed transition countries. In the annual rating “Doing Business” for 2012 of the World Bank Belarus ranks 69th among 183 countries. The Heritage Index of Economic Freedom puts Belarus at 153rd place among “repressive economies”. 

Author: Handbook on Belarus for International journalists