The current political situation in Belarus remains strained, according to Maksim Salahub, Partner at Sorainen in Minsk. Salahub reports that President Lukashenko held an “All-Belarusian Assembly” between February 11 and 12 – an event Salahub describes as “politically sterile.” According to him, “even though the event was supposed to seem all-Belarusian, the participants were carefully selected by the authorities so that the event would instead be attended by Lukashenko loyalists.” Nonetheless, Salahub says, many followed the event closely, hoping that some constructive ideas would be voiced and de-escalation measures proposed. Unfortunately, in Salahub’s opinion, the event only indicated that repression against the pro-reform groups will continue and that the same economic course will be followed as before.
The rigidity of that economic strategy is problematic, and Salahub says that the Belarusian economy has been stagnating for the last ten years, in an outdated structure, with huge government involvement and resistance to privatization. With the Covid-19 pandemic in the mix, the economic woes were only exacerbated. “I have not seen a green- or brown-field investment projects since July,” he sighs.
Still, he says, the situation is not entirely dire, yet. “The salaries, although lagging behind almost every other country in the region, allow maintaining more or less decent living, so no one is starving,” he says, and despite the political controversy, there has not yet been an exit of a major foreign investor from the market, suggesting that large investment projects are likely to continue, albeit at a slower pace and provided the situation does not deteriorate much further.
Salahub confirms that there has been some brain-drain from the Belarusian IT sector into Lithuania, Latvia, and Estonia, but he reports that the sector is far from dead. “We can still see newcomers to our High-Tech Park, which is a special economic zone for IT companies,” he says, although he concedes that, due to the crisis, newcomers are mostly startups, rather than mature IT companies.
According to Salahub, Belarus’s legal framework for investments has improved by leaps and bounds in the last twenty years, and it is soon to be bolstered by a new Law on Commercial Companies. The law will go into effect in April 2021 and, Salahub reports, will bring a more viable concept of shareholders agreements and better mechanisms for resolving issues between shareholders and company management. “Another major bit of legislation is the Law on Personal Data Protection,” he says, “which will bring us closer to the GDPR.”
Salahub reports that the legal market has had its share of turbulence in the past few months as well, with several lawyers – including Maksim Znak and Liliya Vlasova – having been arrested in connection with participating in the pro-change movement (as reported by CEE Legal Matters on September 2, 2020). Nonetheless, Salahub says that there have not been any significant exits or entries on the legal market. “Yet, the situation remains highly uncertain and we might be facing an entirely different picture even a few months from now.”