UCL School of Slavonic and East European Studies, University College London, 7th Annual International Postgraduate Conference

Inclusion Exclusion

16-18th February 2006

Thursday 16 February 2:30 – 4:00: Panel B1: Regional Economies of Inclusion and Exclusion

Kiryl Haiduk (Central European University): ‘Awkward borderland: understanding the political economy of Belarus’s "exclusion"’

The paper discusses the case of Belarus which is gradually becoming more and more marginalized in Europe particularly in the light of ‘coloured revolutions’ in some of the former Soviet Union countries. Labelled ‘the last European dictatorship’, Belarus is indeed moving away from a dynamic process of political-economic adjustments taking place in the former state socialist economies. Despite some growth of social discord and material support from abroad, political opposition has not been successful neither during the formal political contests nor at informal street actions. However, it seems exaggeration to refer exclusively to political coercion; there are consensual mechanisms in place, too.

With this in mind, the paper attempts to understand Belarus’ exclusion by exploring the factors which determine its recent socio-economic and political development. In particular, it is claimed that there is an intrinsic connection between ‘the economic’ and ‘the political’. Attempts to intervene into the economy are not motivated by a plain authoritarian zeal of the charismatic leader of Belarus, but could be seen as a way to avoid a crisis to which a dollarized Belarusian economy is prone to. Given the relative thinness of investment and trade networks with the EU countries, dollarization of the Belarusian economy as well as the resort to offshore finance could be seen as the channels of integration into the global political economy. The direct implication of dollarization and ‘offshorisation’ is not only the vulnerability in the case of currency crisis, but also the growing inequality between remuneration of labour and capital. As a result of high interest rates, labour tends to be underpaid, while export-oriented sectors are better off. To mitigate subsequent wage differentiation and poverty, the government resorts to tough controls of the labour market by proliferation of fixed-term contract employment and implementation of wage levelling policies.

The socio-political developments in Belarus could not be understood in a holistic way without looking at the role of foreign actors and policies. Recently, top-rank representatives of both the U.S. and the EU have declared their intention to support the democratic development in the country. However, little has been done so far. Although opinion polls show that almost half of Belarusians support the idea of EU membership, the EU prefers to harden a border regime. Such an approach could be hardly considered efficient especially in the light of the need to increase the EU influence in the country still in the need for a democratic change.

The abovementioned cases serve as illustration to a somewhat deeper investigation which paper attempts to make. Methodologically, the research favours a cross-disciplinary endeavour, privileging the scholarship of the international political economy as a useful way to comprehend a complex interrelationship between economic and political factors and then nest them into the contemporary European (and international) setting.