The financial crisis and the changes in the Belarusian government

In the second half of December 2014 a financial crisis broke out in Belarus, reaching its peak on 19 December. The interventions which the Belarusian government made in order to prevent the financial market from collapsing have led to the staggered devaluation of the Belarusian ruble by over 30%. As a result of the crisis, on 27 December 2014 Alexander Lukashenko introduced a series of changes in the composition of the government, the central and local administration, the management of the National Bank, and in several large state-owned companies.

Despite the fact that the situation on the foreign exchange market has been contained, structural problems in Belarus’s command-and-distribution economic model remain unresolved. They are deteriorating due to the ongoing crisis on the Russian market (which is key for Belarusian exports) and declining prices of oil and oil-based products. This poses additional risks to the financial condition of the state, particularly in the context of the presidential election to be held this year.