In a previous post, I shared some personal experiences that cause me to believe Belarus has lower-than-advertised levels of corruption, offering a solid foundation for investment. I should also acknowledge that there’s plenty of room for improvement.
Later this year, Alexander Lukashenko, the long-time president of Belarus, will undoubtedly run for another term. Whether it’s because of repression or because the opposition simply won’t be able to unite under a single candidate, Lukashenko will almost certainly win. If Western style democracy is a prerequisite for your foreign direct investment, then Belarus isn’t the place to be.
As you’d expect in a country ruled by one man for twenty years, the press there isn’t free. The FCPA Blog recently highlighted Freedom House’s Freedom of the Press report. Belarus landed in the bottom five, with North Korea, Turkmenistan, Uzbekistan, and Eritrea.
But does repression of the press always translate into an unfavorable environment for FDI?
In that same Freedom of the Press report, just above Belarus is Cuba. Considering the recent easing of the Cuban trade embargo, I expect Cuba to attract significant FDI in the coming years. The authoritarian regime and the repressed press won’t stop companies from taking advantage of an untapped market. Indeed, as the FCPA Blog has pointed out, bankers and investors can flourish in countries ruled by repressive but stable regimes.
Is it reasonable to compare Belarus with Cuba? I think so. Even a European government official has done so. But there are differences. While the diminishing Cuban trade sanctions will probably improve the quality of information available to potential Western investors, Belarus isn’t likely to experience such a change any time soon. Objective journalism is hard to find there, and without a steady flow of quality information, FDI will be deterred.
One current source for news about Belarus is the Belarus Digest. I’m not in any way affiliated with the site. But I think it’s the best non-partisan, English-language source for information about the country. Its reporters work mainly remotely, from London, Boston, Berlin, and Kyiv. The site shows that in the internet age, journalists can produce qualtiy work, even about a country with one of the world’s worst records for press freedom.