LUKASHENKA ARRESTING AND PROSECUTING ECONOMIC MANAGERS.

Flush with self-confidence in the wake of his reelection, Belarusan President Alyaksandr Lukashenka threatened in one speech last November to jail “fifteen” state officials and enterprises managers for poor performance and/or corruption. The threat sounded rhetorical and the number did not seem to have been meant literally. Yet the very airing of the idea portended an escalation of Lukashenka’s campaign to intimidate the country’s nomenklatura into deeper, permanent submission to the president.

In the course of December, however, Lukashenka’s police and judicial apparatus went into action, arresting and indicting for criminal trial seven prominent members of the economic nomenklatura. These include the head of the railroads, the directors of the “Atlant” refrigerator plant and Homel radiotechnical plant–two Soviet-era flagships struggling to survive.

On January 8, the authorities arrested and indicted on criminal charges Mikhail Lyavonau, head of the Minsk Tractor Plant, the largest enterprise of its type in the former Soviet Union, and still the brightest jewel in Lukashenka’s industrial crown. According to the indictment, Lyavonau and a group of his subordinates defrauded the state in three ways. First, by selling the tractors in barter deals, thus failing to pay taxes to the state budget. Second, by pricing their exported tractors at the level of production costs, thereby foregoing a profit margin. And, third, by losing export markets to foreign competitors, whose production costs were still lower than those of the Minsk plant. Such charges, along with the apparent contradictions in the indictment, suggest that the management is being made a scapegoat for the structural ailments of this unreformed industrial giant.

Additionally, the indictment describes a scheme worthy of a Soviet satirical novel. It alleges that Lyavonau and accomplices failed to report the production of some tractors, had them dismantled, smuggled the components outside the plant’s premises, organized the reassembly of tractors outside, and sold them for personal profit. Whatever the veracity of this story, the case seems politically motivated in the first place.

Lyavonau, the plant’s general director since 1995, was among those considered for nomination as candidate of the united opposition in last September’s presidential election. He declined the proposal after discussing it with the opposition leaders, but that he even considered it can be enough for Lukashenka to exact revenge. According to former Deputy Prime Minister Mikhail Marynich, who has joined the opposition, Lyavonau suggested auctioning off the plant as the only way to raise investment capital.

Political retaliation may well be the motive also behind the arrest of the refrigerator plant’s director, Leanid Kaluhin. He entered the presidential race as an independent, only to fall short of collecting the necessary number of voter signatures for the legal registration of his candidacy. The state television is amply publicizing the arrests and giving sometimes lurid accounts of the officials’ alleged malfeasance.

Some local observers interpret the wave of arrests as sealing the victory of the currently dominant clan, led by Prosecutor General Viktar Sheyman, over a losing clan led by the former presidential administration chief Mikhail Myasnikovich and former Prime Minister Uladzimir Yermoshin, both of whom lost their posts last year. It is in any case Sheyman who coordinated the arrests and who controls the pre-trial investigations.

Aside from any interclan rivalries, the arrests and looming trials provide a stark illustration of Lukashenka’s power maintenance strategy. It rests on an unrelenting struggle against the nomenklatura of the final Soviet and first post-Soviet years. It was as the antinomenklarura candidate, masquerading as a populist, that Lukashenka triumphed in the 1995 presidential election. Subsequently, he launched a political war against those segments of the political and economic establishment that stood for re forms, independent statehood and cooperation with the West. It was at the expense of those groups that Lukashenka amassed dictatorial powers.

The “directorial class” of state industry forms Lukashenka’s target in its own right, irrespective of its individual members’ reformist or antireformist inclinations. The president’s goal has all along been to prevent the ex-Soviet officialdom and managerial class from constituting an oligarchy, accumulating assets and creating political parties. He has systematically displaced those groups from any position of authority, abolished the very institutions they controlled, replaced the institutions and their personnel with the “presidential vertical of power,” and is enforcing control over his appointees through the kompromat blackmail system.

A perpetual, if selective, anticorruption campaign against corruption forms part and parcel of Lukashenka’s power maintenance strategy. It serves at least three political purposes. First, to instill insecurity and, thus, obedience in the ranks of his officialdom, particularly in the regions. Second, to maintain a controlled level of popular distrust toward officialdom at all levels below the top, making certain that no alternative power base emerges. And, third, to blame the economy’s poor performance for managerial corruption, thus hoping to postpone the day of reckoning for his rejection of economic reforms. This last goal is becoming increasingly preeminent as the economic situation deteriorates and social problems mount.

Lukashenka has, in the recent past, singled out several prominent economic officials for persecution on an individual bases. In 1999 for example, he jailed the then-agriculture minister Vasyl Lyavonau (no known relation to Mikkail Lyavonau) and the renowned sovkhoz director, highly decorated Vasyl Staravoytav, on corruption charges. At present, however, Lukashenka’s measures seem to be hounding the managerial class as such. The question is whether he will know when to stop, before damaging his pyramid of power beyond repair (Belapan, Belarusan Television, Minsk Radio, Interfax, Charter 97 Belarus News Update, January 5-10; see the Monitor, September 5, 10, 14; Fortnight in Review, September 14, 2001).

RUSSIAN GDP LIKELY TO HAVE EXCEEDED 5 PERCENT IN 2001.