Belarus ’Dictatorship’ Fines Five After 100-Car Blockade

Belarusians Protest Fuel-Price Increase With Car Blockade
Belarus motorists fill up their car's tank at a petrol station in the capital Minsk. Photographer: Viktor Drachev/AFP/Getty Images

Belarus fined five people for staging a car blockade in the capital, Minsk, after gasoline prices jumped, the first show of public dissent since demonstrators were jailed for protesting the results of last year’s elections.

President Alexander Lukashenko today ordered that maximum gasoline prices be restored to their original levels after they were increased by an average of 31 percent yesterday.

More than 100 cars blocked a 2-kilometer (1.2-mile) stretch of Independence Avenue, the city’s main artery, for two hours yesterday, with onlookers cheering them on. Police held five overnight and transferred them today to the Centralny District Court, where they were found guilty of participating in unsanctioned picketing and fined as much as 700,000 rubles ($141 dollars at the official central bank rate).

Lukashenko’s regime, dubbed the “last dictatorship in Europe” by the administration of former U.S. President George W. Bush, devalued its currency by 36 percent against the dollar last month. The leader, who has ruled Belarus since 1994, gained a fourth term after a Dec. 19 election that the Organization for Security and Cooperation in Europe said wasn’t free or fair.

“The government probably wants to solve its financial problems this way,” said Marianna Gruzdilovich, whose son Pavel, 28, was among those fined today. Supporters of the protesters created a website to collect donations to help pay the fines.

Gasoline Prices Jump

The retail price of 95-octane gasoline rose to 5,800 rubles per liter, state-owned energy group Belneftekhim said in a statement yesterday.

Prices must not exceed 4,500 rubles from tomorrow, Lukashenko told a government meeting today, Interfax reported.

“If you need, add 2 percent to 3 percent to gasoline prices each quarter, but not 30 percent,” Luakshenko said, according to the news service.

Traffic returned to normal by 9:45 p.m. yesterday. Drivers, with cars flying white ribbons from radio antennas, had started the protest by pretending to have broken down.

Belarus has asked the International Monetary Fund and the Russian-led Eurasian Economic Community for loans as the ruble slumps and the current-account deficit widens. The shortfall, the widest measure of money flowing in and out of a country, reached 16 percent of gross domestic product last year, more than Greece’s.

Belarus’ sovereign bond due 2015 fell for a second day, pushing the yield up 26 basis points to 11.29 percent as of 7:23 p.m. in Minsk.

Political Repression

Moody’s Investors Service rates the country’s sovereign debt at B2, five steps below investment grade and on par with Honduras and Venezuela.

U.S. President Barack Obama on May 28 said Belarus, a country of 10 million wedged between Russia and European Union member Poland, was “backsliding” as political repression intensifies, which may harm other countries in the region.

The U.S. will pursue new sanctions against some Belarusian state-owned companies in addition to travel restrictions and asset freezes already in place after opposition presidential candidates were sentenced to prison, Obama said during a trip to Poland.

The Eurasian Economic Community agreed to provide the former Soviet republic with a $3 billion, 10-year bailout on June 4 and Lukashenko is also seeking a second stabilization loan from the IMF, which in 2009 provided Belarus a $3.44 billion emergency loan.

‘Eager to Destabilize’

Lukashenko in an April 21 speech said there were “efforts to spur panic buying in the foreign exchange and consumer markets, with the assistance of domestic and foreign analysts.”

“It’s obvious that someone is eager to destabilize the country and sow chaos and distrust of the government, and after that the problems that ensue could strangle our country and our independence,” Lukashenko said.

Belarus’s gold and foreign-currency reserves fell to $3.59 billion in May, the lowest since August 2009, the central bank said yesterday. Policy makers raised the main interest rates twice last month to stem outflows and buoy the ruble.

The benchmark refinancing rate rose 2 percentage points to 16 percent as of June 1, the world’s highest.

“Although part of Belarus’s balance of payments gap is likely to be bridged by loans from multilateral sources and planned privatization, external liquidity will remain tight over the next year,” Moody’s said in a statement yesterday.

Foreign-currency shortages and rising interest rates may curb economic growth in the second half of 2011 and in 2012, the credit evaluator said.

Unpopular Measures

Measures needed to improve productivity and international competitiveness, including limits on income growth and subsidy cuts, would “undoubtedly be unpopular and could jeopardize the seeming stability that has characterized Belarus’s authoritarian political environment for almost two decades,” Moody’s said.

The country may need as much as 18 months to resolve its monetary crisis, Russian Deputy Finance Minister Sergei Storchak told reporters in Moscow yesterday. Russia’s financial assistance is conditional on Belarus taking steps to increase capital inflows, including $7.5 billion in state asset sales.

“This country is so hopeless that people are leaving it,” said Andrey, a 24-year-old construction worker, who declined to give his last name as he watched the demonstration. “Somebody has to finally do something.”

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