Trouble between Minsk and Moscow
Belarus's state controlled economy has been in trouble since Russian subsidies and cheap energy started tapering off a couple years ago, amid increasingly acrimonious relations between Minsk and Moscow. Lukashenko worsened matters by ramping up state spending by 40 percent in advance of his reelection campaign last year, including a 50 percent salary hike for all public sector workers.
Lukashenko, who's run Belarus with a mixture of economic paternalism and police state rigor since 1994, won reelection with 80 percent of the votes. But he lost European Union pledges of assistance by launching a brutal crackdown against political opponents, who took to the streets to allege electoral fraud. More than 600 people were arrested, including seven presidential candidates, and many remain in prison.
Moscow, which previously bankrolled Lukashenko, has put a heavy price on any further assistance.
"Russia has abandoned its imperial ambitions in the traditional sense. It's not going to be sending tanks into Belarus," says Fyodor Lukyanov, editor of Russia in Global Affairs, a leading Moscow foreign policy journal. "What Russia wants is for Lukashenko to let go of valuable assets that the state controls, and sell them to Russian interests. That includes pipelines, refineries, potash and maybe a few choice industries."