Assessing the Political and Economic Situation in Belarus: An Awkward Partner Beyond the Enlarged European Union?

Abstract

Eastward enlargement of the European Union (EU) and the North Atlantic Treaty Organisation (NATO) will redraw the continental map at a truly historic scale. Accordingly, in the next year Belarus will find itself bordering the enlarged EU, which will en-compas the republic’s immediate neighbors, such as Latvia, Lithuania, and Poland. This situation poses questions about what kind of risks and opportunities might arise and which policy reactions are needed. Could Belarus and the enlarged EU implement policies that will contain the seeds of efficiency that may sustain “peaceful coexistence” between two neighbors? The answer is far from certain for a a number of reasons. Politically, the country stands far from Brussels-based and other EU institutions in political, economic and ideological terms. As a result, Belarus is often treated as an “outcast” of Europe, the last refuge of authoritarianism, located at the distant periphery of the European transition economies’ spectrum. Belarusian economic performance — made up of puzzling economic growth, high inflation, slow industrial restructuring, low investment and permanent pressures to devalue the Belarusian currency — is not very impressive, especially in the light of the dynamic processes of EU enlargement and economic reforms in Central and East European (CEE) transition economies, which have been reshaped by myriad decisions about trade, investment, and foreign aid. As might be tentatively suggested, Belarus could improve its economic performance by using the trade and investment opportunities typically associated with the “widening” of the EU and by synchronizing and catching up with more advanced reformers, including not only Central and East European countries (CEECs), but also the Russian Federation (RF).