Belarus is susceptible to Russia's economic crisis

Subject

Economic outlook.

Significance

Concern is growing in Belarus about the contagion effects from the economic crisis in Russia to which its economy is closely linked. In the run-up to presidential elections (due no later than November 2015), President Alexander Lukashenka needs to perform two economic sleights of hand. First, he needs to revive a sluggish economy but without structural reforms that would almost certainly be resisted by the powerful bureaucracy. Just as importantly, he must maintain good relations with Moscow, despite recent friction over bilateral trade.

Impacts

• Lukashenka's rapprochement with West may ease the suppression of domestic opposition.
• Further reshuffle of key officials is likely in order to deflect economic blame away from Lukashenka.
• Belarus, currently with observer status, will draw closer to the Shanghai Cooperation Organisation in 2015.