Area: approx. 129,000 sq. miles, slightly smaller than Kansas
Population: 10,322,151 (2003 est.)
Annual Inflation: 42.8% (2002 est.)
Population Growth Rate: -0.12% (2003 est.)
Gross Domestic Product (GDP): $90.19 billion (purchasing power parity, 2002 est.)
Life Expectancy: male ? 62.5 years, female ? 74.6 years (2003 est.)
GDP Per Capita: $8,700 (purchasing power parity, 2002 est.)
Infant Mortality: 13.87 deaths/1,000 live births (2003 est.)
Real Annual GDP Growth: 4.7% (2002 est.)
U.S. STRATEGIC INTERESTS
With its educated population and strategic location as a transit route between Russia and an expanded NATO and European Union (EU), Belarus has the potential to contribute to regional economic development and stability. However, to fulfill this potential, Belarus needs to implement appropriate democratic and market reforms, and the autocratic regime of Lukashenko often hinders progress and isolates Belarus from Europe and the international community. It is therefore in the U.S. interest to remain engaged in promoting the development of democratic institutions and the rule of law. The U.S. Government (USG) seeks to work towards this goal in coordination with the EU, the Organization for Security and Cooperation in Europe (OSCE), and Belarus? neighbors.
OVERVIEW OF U.S. GOVERNMENT ASSISTANCE
In FY 2003, the U.S. Government provided an estimated $25.53 million* in assistance to Belarus:
- $9.18 million in democratic reform programs (including Public Diplomacy exchange programs)
- $100,000 in economic and social-sector reform programs;
- $1.33 million in humanitarian programs; and
- privately donated and U.S. Defense Department excess humanitarian commodities valued at $14.92 million.
(*This total includes $300,000 in FY 2002 FREEDOM Support Act (FSA) funds allocated during 2003.)
In FY 2003, over 200 Belarusians traveled to the United States on USG-funded training and exchange programs implemented by USAID and the U.S. Departments of Commerce and State, bringing the cumulative number of Belarusian participants to over 2,700.
U.S. ASSISTANCE PRIORITIES
Democratic Reform Programs: In FY 2003 U.S. democratic reform assistance aimed to engage diverse elements of Belarusian society to increase citizens? awareness and implementation of democratic practices. Main priorities included helping to develop and strengthen the non-governmental organization (NGO) sector, increasing access to objective information through the Internet and strengthening independent print and broadcast media, developing skills and knowledge of democratic political processes including electoral reform, and building legal defense capacity and advocacy for the rule of law. The USG also supported capacity-building and legal assistance for independent trade unions. USG-funded exchange programs were tailored to familiarize a wide range of Belarusians, from students to professionals, with a democratic, market-based system.
Economic and Social Sector Reform Programs: In FY 2003, in part due to the USG?s policy of selective engagement with the Government of Belarus, the USG had only a limited program in economic and social reform. Through short training courses under two cross-border cooperative programs for entrepreneurs and economists, and through International Visitor exchange programs, the USG sought to build professional expertise and interest in market reform in both the public and private sectors. Small projects in environmental health and agricultural development continued. In the fight against trafficking in persons, the USG worked through grants to international organizations and NGOs to provide preventive education campaigns, training for alternative economic opportunities, and assistance to trafficking victims.
Security, Regional Stability and Law Enforcement Programs: Due to policy constraints, the USG did not have a security assistance program with Belarus in FY 2003. The USG continues to send a select number of Belarusian military and civilians (a total of 15 in FY 2003) to seminars and courses at the U.S. Defense Department?s Marshall Center with the goal of promoting military reform and future cooperation in areas of mutual interest.
SECTORAL ASSESSMENTS
Democratic Reform
In FY 2003, Belarus continued to face major challenges in democratization, with the Lukashenko administration intensifying its crackdown on civil society. The year saw an increased level of harassment of civil society organizations, especially regional NGO resource centers, human rights groups, and independent media outlets. Pro-democracy activists, including some independent trade union leaders and newspaper editors, were detained, fined and imprisoned for criticizing the government. The authorities closed or suspended approximately 20 independent newspapers. The government made increased use of tax inspections and augmented technical registration requirements in order to control or deny registration to independent groups. Unregistered NGOs can no longer operate while their registration is pending, and groups that receive assistance from unregistered organizations can be immediately shut down. Educational institutions were also subjected to increased government interference. A March 2003 presidential directive called for the reintroduction of a state ideology system in universities and state enterprises. The Parliament adopted a restrictive law on religion, and a draft media law, if adopted in 2004, threatens to circumscribe press freedom even further.
As with other former Soviet states, Belarus has no history of independent civil society organizations playing a significant role in the country?s political, economic, and social development. USG assistance in FY 2003 sought to build and strengthen civil society through a broad range of programs: Public Diplomacy exchange programs to study the U.S. democratic, market-based system; Democracy Commission small grants to support individual organizations? initiatives; and a USAID civil society development program. The major focus of the latter was the expansion of the "public club" concept to a broader scope ? 18 clubs covering both rural and urban sites in a number of new locations across Belarus. The public clubs serve as local forums for information sharing, identifying local problems, setting priorities and developing solutions. In one case, a public club was able to build such strong community support that the municipal authorities agreed to co-finance a local clean-water project. Beginning in FY 2003 and continuing into 2004, public clubs in the more advanced communities will be trained and encouraged to evolve into community development foundations. A related program seeks to train lawyers who can help communities expand their legal knowledge and promote citizens? engagement in local problem solving.
Other rule-of-law programs provide legal consultations and analysis for NGOs. One women?s group obtained a legal analysis that allowed it to further its agenda of promoting the reform of household communal services. The USG, both bilaterally and through the International Labor Organization (ILO), also supported legal assistance and capacity-building for independent trade unions.
USAID and the Democracy Commission supported youth and women?s NGOs with training and project support. A new generation of leaders is appearing, and women?s groups are the most vibrant actors in social sector reform. Graduates of youth leadership training organized some 50 community events in 2003 and spearheaded new youth groups addressing issues as varied as HIV/AIDS awareness and prevention, extracurricular activities for vulnerable youth, and education initiatives uniting teachers, social workers and students.
The March 2003 elections for local government councils suffered from the same flaws as previous parliamentary and presidential elections. Despite unbalanced electoral commissions, inability to monitor polling freely, and pressure on many independent candidates to withdraw, a minority of them succeeded in winning seats on local councils. One positive result of the political-process training program and related exchanges was apparent in greater use of outreach techniques and issue-oriented campaigning at the local level. Putting into practice door-to-door outreach and message development training enabled many pro-democracy candidates to gather more than enough signatures for registration. With their new campaign skills, 53 actually won seats even in the very difficult political environment. A civic observation network gathered information for election-related databases, and in the process, its members talked to thousands of ordinary citizens about non-partisan civic activism. Toward the end of FY 2003, democratic political parties and organizations were implementing political process training. A group of more than five democratic political parties built a coalition with a common platform, agreed on a list of candidates, and are developing a unified strategy in the run-up to the 2004 parliamentary elections.
In FY 2003, USG assistance to independent media continued to focus on professional training and other equipment needs, thus allowing these media outlets to continue operation in an increasingly hostile environment. USG assistance has significantly increased the quality of reporting on national and regional economic topics, as well as issues of local interest. A number of papers were also able to develop significant alternative distribution systems. According to independent polling, the level of public trust in independent media has doubled over the last five years.
Recognizing the vital importance of education for the next generation in the functioning of a democratic, market-oriented society, the USG maintained strong exchange programs in 2003, ranging from academic exchanges for high school students and Fulbright scholars to short-term visits for professional groups and International Visitor programs. The USG also provided scholarship support for students at the European Humanities University (EHU), Belarus? major independent university.
In FY 2004, USG assistance will continue its primary emphasis on civil society development and support for independent media. Appropriate support for strengthening democratic political processes will also be provided. More emphasis will be placed in the next year on broadening program outreach both geographically and to all levels of Belarusian society. One new challenge for assistance delivery in 2004 is the increased scrutiny and harassment of NGOs implementing USG-funded programs.
Economic and Social Sector Reform
In FY 2003, Belarus experienced growth of around 6.5%. However, this growth was largely funded by the issuance of government-ordered bank loans to troubled state enterprises and an increase in oil and gas supplies. Inflation remained high, at 25%, but slowed from the previous year. The Belarusian ruble depreciated by 12% against the dollar in 2003 ? the highest depreciation rate in the Eurasian region. The Belarusian ruble, while technically convertible, remains unavailable in currency markets outside Belarus, attesting to its weakness. Both imports and exports increased dramatically in 2003, with imports outpacing exports and leading to a growing trade deficit. In 2003, the budget deficit rose to over 2% of GDP after several years of balanced budgets.
The Belarusian Government continued to hold tightly to the socialist command model of the economy, with around 80% of business still under government control. Taxes on small businesses and individual entrepreneurs continued to increase in FY 2003, while more state businesses became unprofitable; even usually biased official estimates showed that around 40% of state businesses were unprofitable. The government remained reluctant to privatize large state enterprises, and, when it did make such companies available for investment, it insisted on maintaining a controlling share.
Belarus spends about two-thirds of its budget on social benefits, but still has not passed legislation to modernize its health sector or to reform the pension system. Pensions and wages have generally been paid on time, although there are some reports of delays in implementing increases in rural areas. The government has continued to order wage and pension increases, which provide short-term improvements in standards of living, though at the cost of increased levels of business inventory, as mandated production fails to find markets, and a worsening of the fiscal imbalance. Pensions remain below the government-estimated poverty line. HIV/AIDS infection rates continue to rise, though the disease is still largely confined to high-risk groups.
Ongoing discussions on currency union and economic integration with Russia resulted in little concrete action, with Belarus postponing its planned move to peg the Belarusian ruble to the Russian ruble. Belarus and Russia also failed to reach agreement on future gas prices, which will likely lead to natural gas prices rising 30 to 40 percent in 2004, on average.
Policy and resource constraints limited USG assistance in the economic and social sectors in 2003. Various small grants supported the development of a favorable business environment for sustainable eco-tourism by drafting laws and regulations to remove impediments to the development of this sector. A continuing farmer-to-farmer program aimed to improve the incomes of private farmers? associations, develop private agribusinesses, and stimulate entrepreneurial initiatives in the agricultural sector. Successful cross-border cooperative programs sent Belarusians to economic and entrepreneurial training in neighboring Lithuania.
Addressing the USG?s high priority of combating trafficking in persons, the USG funded two programs in 2003 ? one through the International Organization for Migration (IOM) and one through a USAID implementing partner ?to support an anti-trafficking public education campaign, provide victim assistance, and develop job-market skills and economic opportunities for at-risk women.
Security, Regional Stability, and Law Enforcement
Belarus agreed to become a non-nuclear state following the collapse of the Soviet Union. However, it is a supplier of conventional armaments and spare parts in the world market. Belarus is a member of the International Science and Technology Center (ISTC), a Moscow-based international organization devoted to redirecting former Soviet weapons-of-mass-destruction (WMD) scientists to peaceful employments. Due to concerns about human rights and democracy, the USG did not fund assistance projects for Belarusian former WMD scientists in FY 2003. The only USG funds going through the ISTC to Belarusian scientists came from the National Cancer Institute to support studies on the long-term health effects of exposure to radiation from the 1986 explosion at the Chernobyl nuclear power plant.
Because of current USG policy, the USG also did not provide bilateral security or law enforcement assistance to Belarus in FY 2003. Belarus participated in some NATO Partnership for Peace programs, and 15 military officers and civilians attended Marshall Center programs to promote military reform and civilian control of the military. These programs will continue at approximately the same level in 2004.
Humanitarian Assistance
In FY 2003, the Departments of Defense and State continued to provide humanitarian assistance to Belarus, largely in the health sector. The Department of State delivered approximately $14.9 million in privately donated pharmaceuticals and humanitarian supplies and in Department of Defense excess commodities, at a cost to the USG of approximately $710,000. The Defense Department completed a hospital renovation project valued at $174,000, and providing an additional $426 million in other humanitarian assistance. Similar types of humanitarian assistance will be provided in 2004 to support Belarus? inadequate health-sector facilities.
COUNTRY PERFORMANCE MEASURES
At the macro-level, Belarus did not progress in overall economic policy and democratic reforms in FY 2003. Government repression of NGOs and independent media increased. Nevertheless, despite these barriers, civil society institutions continued to develop, and some positive signs of democratic political process development were observed at the local level.
Economic Policy Reforms and Democratic Reforms in Belarus, 1991-2002
Democratic Reforms
Ratings of democratic freedoms are from Freedom House, Nations in Transit 2003 (2003) and cover events through December 2002. Economic policy reform ratings are from EBRD, Transition Report 2002 (November 2002), and cover events through September 2002. Economic policy reforms include price liberalization, trade and foreign exchange, privatization, legal, banking and capital markets, enterprise restructuring (credit and subsidy policy), and infrastructure reforms. Democratic freedoms include political rights (free and fair elections; openness of the political system to competing political parties and to minority group representation; governance and public administration) and civil liberties (free media and judiciary; freedom to develop NGOs and trade unions; equality of opportunity and freedom from corruption). Ratings are based on a scale of 1 to 5, with 5 representing the most advanced.
Economic Structure and Human Development in Belarus, 1991-2002
Human Development Index
The Human Development Index (HDI) is based on three indicators using 2001 data: longevity, as measured by life expectancy; educational attainment, as measured by a combination of adult literacy and combined primary, secondary and tertiary enrollment ratios; and standard of living, as measured by real per capita GDP ($PPP). The HDI ranges from 0 to 1, with higher values representing greater human development. UNDP, Human Development Report 2003 (July 2003). Private-sector share of GDP is from EBRD, Transition Report Update (May 2003).
SECTORAL PERFORMANCE MEASURES
DEMOCRATIC REFORM
Performance Indicator: Freedom House Nations in Transit (2003) Civil Society Rating
(1 = highest, 7 = lowest; data based on previous calendar year)
|
FY 2002 Baseline |
FY 2003 Target |
FY 2003 Actual |
|
6.25 |
|
6.5 |
FY 2003 Results: FY 2003 was a difficult year for NGO development in Belarus. The Belarusian Government conducted a number of inspections of NGO activities in Minsk and regional urban centers. Dozens of civil society groups, NGO resource centers, and human rights organizations were subjected to fines and closure on flimsy legal grounds and minor technicalities. Nevertheless, at the local community level, some authorities appeared to develop a more positive recognition of the role and contribution of NGOs, and there were instances of productive cooperation between local civil society groups and local government. However, the generally unfavorable environment led to a worsening in the NGO Sustainability Index for 2003.
Performance Indicator: Freedom House Nations in Transit 2003 Independent Media Rating
(1 = highest, 7 = lowest; data based on previous calendar year)
|
FY 2002 Baseline |
FY 2003 Target |
FY 2003 Actual |
|
6.75 |
|
6.75 |
FY 2003 Results: State-controlled print and broadcast media do not offer a plurality of views. Independent media cautiously attempt more balanced reporting, but in FY 2003 the government closed or suspended some 20 non-state newspapers and seized equipment from private regional television stations. Independent polling showed a significantly increased level of public trust in independent media, but government control of printing houses and the major distribution channels, along with media closures, resulted in a drop in total weekly circulation in 2003 for private newspapers.
ECONOMIC AND SOCIAL REFORM
Performance Indicator: Private-sector share of GDP (Source: EBRD)
|
FY 2002 Baseline |
FY 2003 Target |
FY 2003 Actual |
|
20% |
25% |
Data not available |
FY 2003 Results: The government did not pursue a significant privatization program in FY 2003. Major industries remained in government hands. Foreign direct investment in Belarus was among the lowest in the region. The regulatory and tax environment was not conducive to expanding the private sector.
Performance Indicator: Employment in small and medium-sized enterprises (SMEs) as a percentage of total employment (Source: World Bank, August 2003)
|
FY 2002 Baseline |
FY 2003 Target |
FY 2003 Actual |
|
4.59% |
|
Data not available |
FY 2003 Results: Small business owners protested several times during FY 2003 against government moves to close small kiosk retail outlets. More regulations were imposed on licensed businesses, and the tax burden remained heavy. These factors made expansion of the SME sector difficult.
Performance Indicator: Human Capital Index (Source: World Bank and UNICEF, 2003) (10=highest, 1=lowest)
|
FY 2002 Baseline |
FY 2003 Target |
FY 2003 Actual |
|
5.5 |
5.7 |
Data not available |
FY 2003 Results: Freedom House characterized Belarus as a country of contradictions. Belarus has a highly educated and skilled workforce, but over half the population lives below the poverty line. The birth rate has declined and annual mortality has increased. HIV/AIDS is on the rise. There was real wage growth in FY 2003, but much less than projected (1.5% versus the government?s projected 7-8%).
SECURITY, REGIONAL STABILITY, AND LAW ENFORCEMENT
Performance Indicator: U.S. State Department Global Trafficking in Persons Annual Report country ranking (1 = highest, 3 = lowest)
|
FY 2002 Baseline |
FY 2003 Target |
FY 2003 Actual |
|
2 |
|
2 |
FY 2003 Results: The Belarusian authorities and internationally supported Belarusian NGOs took positive steps in FY 2003 to combat trafficking in persons. They implemented programs for prevention and victim protection, and law enforcement showed increasing seriousness in efforts to strengthen prosecution. As a result, Belarus qualified as a country taking concrete action to reduce trafficking from and through the country.
FY 2003 FUNDS BUDGETED FOR U.S. GOVERNMENT ASSISTANCE TO BELARUS
TOTAL USG FUNDS BUDGETED: $10.31
VALUE OF DONATED HUMANITARIAN COMMODITIES: $14.92
TOTAL FY 2003 USG ASSISTANCE: $25.23
(IN MILLIONS, AS OF 12/31/03)
FSA FUNDS BUDGETED: $9.05
USAID - Democratic Reform - $3.92
USAID - Parking Fine Withholding - $0.00
USAID - x Eurasia Foundation - $0.25
USAID TOTAL - $4.17
Dept. of Commerce - BISNIS Business Info. Service - $0.02
Dept. of Commerce - SABIT Business Internships/Training - $0.08
DEPT. OF COMMERCE TOTAL - $0.10
Dept. of State - ECA Public Diplomacy Exchanges - $2.47
Dept. of State - EUR Democracy Programs (incl.Dem.Comms.& NED) - $1.80
Dept. of State - EUR/ACE Humanitarian Transport - $0.50
DEPT. OF STATE TOTAL - $4.77
OTHER FUNDS BUDGETED: $1.27
Dept. of State - ECA Public Diplomacy Exchanges - $0.40
Dept. of State - International Information Programs (IIP) - $0.04
Dept. of State - PRM Humanitarian Assistance - $0.23
DEPT. OF STATE TOTAL - $0.67
Dept. of Defense - Humanitarian Assistance - $0.60
DEPT. OF DEFENSE TOTAL - $0.60
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