Thousands protested against a USD 250 tax on those who work less than 183 days per year, known as the ‘tax on social parasites’. The first demonstration started mid-February of this year. Many protesters were middle-aged and elderly people who complained that the tax unfairly punished those unable to find a job. The implementation of the tax introduced in 2015 was postponed until the end of this year. However, the suspension was not sufficient to diffuse protests. The authorities arrested hundreds of activists. In the meantime in Russia, thousands across the country also took to the streets to complain against corruption, representing the largest protests in Russia since 2011-12.

Impact on country risk

Protests of this scale are rare in Belarus. They occur as the country has been in recession for two years and they represent a challenge for President Lukashenko who has been in power since 1994. The arrest of hundreds of protesters could jeopardise Lukashenko’s attempts to improve ties with the EU and rather prompt the imposition of new sanctions on Belarus. Last year, following the release of several political prisoners, the EU lifted its sanctions on Belarus. The improvement of their bilateral relation aimed at reducing the country’s reliance on Russia, its traditional ally and its key trade and financial partner. Given the country’s poor liquidity, Credendo’s short-term political risk rating is currently in category 7. Indeed, short-term debt is elevated, current account receipts are under pressure and foreign exchange reserves are low.

Analyst: Pascaline della Faille, p.dellafaille@credendo.com