Outcomes for 2015, Forecast for 2016

Outcomes for 2015: a deep recession and dim prospects for economic recovery

Forecast for 2016: conservation outguns innovation

Most important trends in 2015

• Conservation of the socio-economic model
• Increased demand for systemic transformations in the Belarusian society, especially in the economy
• People’s expectations of the state’s social protection lowered
• The state cut social guarantees to the population
• Some political elite acknowledged recession and the need for reforms
• The government divided into supporters of market reforms and antireform conservatives
• Reduced capacity for mobilisation for both, the authorities and the opposition
• Cautious neutrality in foreign policy
• Minsk earned a reputation of a peacekeeper
• Enhanced attention to national security

Main threats in 2016

• Tensions and protest moods in society will rise due to falling living standards and a cutback on social protection
• Deeper economic recession due to the lack of political will to reform the existing socio-economic model
• The Kremlin will step up pressure to deploy a Russian military air base in Belarus in exchange for financial aid and loans
• Amid dwindling state resources and fewer opportunities to distribute budgetary and export flow of funds, conflicts in nomenclature and state sidekick businesses will mount
• Minsk and Brussels will exhaust potential for reciprocal concessions in the process of Belarusian-European normalization

Most likely trends for 2016

• The state will imitate reforms in order to obtain external financing
• The likelihood of real economic reforms will depend on oil prices’ dynamics
• The state apparatus will step up the struggle for the redistribution of resources
• The opposition will reshape before the parliamentary elections
• Minsk will anchor its peacekeeping reputation and neutrality on the international arena
• Belarus will evade direct involvement in inter-state conflicts on the Russian side
• The authorities will abandon practices of supporting employment at any cost
• Industrial production capacity will continue to reduce