Belarus on the verge of default

MINSK — Belarusian authorities have devaluated the Belarusian ruble by 55 percent. Some sources point to a panic in the capital city, with people frantically buying all kinds of goods. Negative political consequences are also possible.

I’m using my laptop, typing these lines while waiting in line in front of a filling station. Just about 300 meters to go, not much compared to what is happening elsewhere. Before midnight, unlike in the Cinderella story, our gas will turn not into pumpkin but into gold, as the filling prices will increase by 25 percent. In 90 minutes the dollar exchange rate will go up by 60 percent, and this considering that Petr Prokopovich, head of the National Bank of Belarus, swore on March 17 that there would be no devaluation for as long as he had his post.

My friends in Ukraine ask me how the Belarusians are feeling about Lukashenka’s decision to trade Beltransgaz for a loan from Russia. I tell them there is no feeling, simply because the whole affair isn’t public knowledge, save for a carefully edited news bulletin on Belarus’ first government-run channel. We learned about the deal from Kudrin and Lazarev, with the hostess, sporting a pink blouse, happily announcing that Belarus would now receive a loan from Russia, that the end of the world had been postponed. The lady seemed to forget to inform that the privatization of Belarusian businesses, with Beltransgaz in the first place, cost three billion dollars. Now the only golden-egg-laying goose Belarus has is its potash company, along with less important businesses like refrigerator production, steelworks and a toy factory that specializes in orange crocodiles and pink elephants.

Belarus-made MAZ trucks? Russia’s KamAZ has a three-quarter interest in the company. Belarus-made trolleybuses? You want a laugh? I heard this week that out of the 25 vehicles sent to Chisinau [the capital of Moldova], 16 broke down on the way. Now they are sending them back under the warranty clauses and plan to buy Skoda products. Belarus-made tractors? Use your Google search engine, find Minsk and its tractor plant. You will see blue-red spots on a chart. These represent more than 5,000 tractors waiting to be sold. Fat chance, considering that a number of Belarusian state farms are using John Deere and Caterpillar models.

How does the Belarusian in the street feel about the sacrifice of Beltransgaz? He doesn’t know, period. Two weeks ago Belarusians besieged stores, buying all the sugar and buckwheat they could lay their hands on, at three to four times the normal price. The Day before yesterday, there was no salt available. Yesterday, I couldn’t buy a box of matches. How can you talk people into investing in salt and matches?

I spotted an interesting video on the Internet about Minsk’s refrigerator company’s store. Ten minutes before opening time about 30 persons stood in line, except that they weren’t standing but rather yelling, elbowing out those they thought were intruders. Then the door opened and the two security guards inside were lifted up and thrown out of the way.

Not so long ago, the administration of a popular Minsk-based hypermarket had to call the local SWAT-equivalent as a group of “non-Slavic-looking individuals” tried to get ahead of the line to a foreign exchange booth. And that line was made up of some 250 people, each of whom had to sign the waiting list every day and spend the night there precisely because of such intruders.

The reasons behind the ruble’s plummeting rate can be counted on the fingers of one hand. A salary now amounts to 1.5 million Belarusian rubles. Last month it was worth 500 dollars, today it is worth 300. A grim picture, considering that a pack of pelmeni dumplings recently sold at 4-5,000 rubles. Today you have to pay 11,000 rubles. And, of course, the cost of gas (I’m still in my car waiting in line). Yesterday I could pay 1.5 million rubles for 454 liters of RON 92; today I would get 379 for this money. Seventy-five liters of gas per day, with wage plummetings, while hearing about the official exchange rate of 4,930 rubles per dollar. The black market rate ranges between 8,500 and 9,000 rubles. Back to the good old 1990s!

There is, however, the fact that we Belarusians are a battle-hardened people. We have incredible ways of turning our cheap rubles into hard cash.

Number one: transfers. You can send a thousand money orders to Russia where your recipients will get the money in Russian rubles, then convert the sum into dollars and send it back. Belarus’ Postal Service owes its Russian counterpart seven million dollars and can’t repay the debt because US dollars can’t be purchased in Belarus.

Number two: railroads. A smart Belarusian buys a ticket for Irkutsk in Minsk, paying 1,430,000 rubles (worth 290 dollars at the new exchange rate). The trip lasts four days and ends in the middle of nowhere, so the somber Belarusian boards a commuter train to Smolensk where he turns in his train ticket and gets a refund in Russian rubles. Our crisis has made us extra-resourceful.

Number three: gasoline. A smart Belarusian pays for a full tank of diesel fuel for his old Passat model, crosses the border and sells his car to a Pole (and his car is packed with cartons of cigarettes in all possible hiding places). One such smart operator complained to me that Polish customs inspectors had one day discovered his caches and fined him 200 dollars, but then he admitted that he was making between 250 and 300 bucks each trip, so no big deal.

We in Belarus recently saw official statistics to the effect that our bankroll (I mean the money our population is supposed to have) was up by 21 percent in April. True, you can receive crisp new banknotes as change when paying for food in any of our stores, except that our people are anxious to get rid of this money as soon as they can.

All this is happening against the backdrop of the trials over those who took part in the rally on City Square against the outcome of the presidential election (December 19, 2010). One of the key dissidents, Andrey Sannikau, has been sentenced to five years in a maximum security prison camp. The state prosecution wanted eight years for Mikalay Statkevich and seven years for Dzmitry Vus [pronounced oos]. Let me quote from the Vus file. Two points. First, there is a transcript of his conversation with his son who went shopping and called his father, telling him he had spotted five cars with counter-terrorists parked around the corner. The state prosecutor qualified this evidence as “data collected in order to resist law enforcement agencies.” The other point is that Dzmitry Vus had told a ranking traffic cop, while the rally was in progress, “Join us, you will be promoted to general.” This was qualified by the state prosecution as an attempted coup d’etat. The situation with Statkevich was similar; when he was standing on the stairs leading up to the Government Building, he got a phone call from a friend, a Ukrainian businessman, who said, jokingly, “Well, Mikalay, now you can step into that building, take the Prime Minister’s seat, and press the necessary buttons.” This statement figures in his criminal file as an act of espionage.

Getting back to the Belarusians’ response to the takeover of Beltransgaz. Most of the people don’t have the vaguest idea about what has come to pass, that the next thing they will learn will be that they have been robbed clean… The above is only a fleeting glance at what is happening in Belarus. Well, the line is moving, so I have to stop to fill my tank, along with two extra tanks in the back of the car, before midnight.