THE POST-WWII ECONOMY IN BELARUS By Alexandra Ginieres
Growing a Modern Economy by Amy Johnson
THE POST-WWII ECONOMY IN BELARUS
By Alexandra Ginieres
World War II and the subsequent process of Russification dramatically altered Belarus' economy. Before the war, Belarus was predominantly rural and most Belarusans were peasants. In 1939, eight out of every ten were working in
agriculture. (Vakar, 17) The devastating consequences of the war, however, forced a rapid urbanization and industrialization of the country. Rural areas became neglected wastelands, while the larger cities were built up with factories. Data concludes that indeed the economy did recover and grow, but this industrial growth occurred at the expense of the countryside. While the cities were expanding, hundreds of thousands were living in poverty and trying to deal with the losses of the war.
German occupation in Belarus began in 1941 and did not cease until 1944. The occupation resulted in 2.2 million deaths, the destruction of 209 cities and townships and 9,200 villages, and uncounted material losses. (Zaprudnik, 239) An American observer who traveled to Belarus still two years after the war commented that "During six months...I traveled from one end of this republic to the other and I can only think of it as the most devastated country in the world." (Vakar, 209) Acres of buildings were destroyed in cities and towns, and Minsk itself was 80 percent destroyed. In rural areas, 1,215,000 houses and farm buildings were destroyed and more than 3,000,000 people were rendered homeless. Roads were unpassable, communications were disrupted, equipment was destroyed, and "the economy had returned to the Stone Age." (Vakar, 209)
It became the responsibility of the Soviet government to rebuild this war-torn republic. Central planners found it necessary to devise a Five Year Plan for Belarus that would cover the years from 1946-1950. Under this plan, 6,950,000,000 rubles were invested in construction and repairs. It also called for an industrial output of 16 percent above the 1940 level. Schools were to be built and millions of acres of land were to be cultivated. (Vakar, 211) The focus of this plan was the industrial expansion, rather than the rural recovery, of Belarus.
The results of this plan were apparent. By the end of the plan period, industrial output in the republic already exceeded the prewar level by 16%. This was a result of the development of machine building, energy production, and the chemicals industry. (Marples, 20) Civil construction continued at a steady pace and cities began to grow. Between November 1946 and December 1952, machine building and consumer goods-producing factories opened in Minsk, Viciebsk, and other cities. Schools and hospitals were built, a streetcar line was opened in Minsk, and in 1956 the Minsk Television Center began transmissions. (Zaprudnik, 114) Within five years, planners had claimed that their plan was "most successfully completed." (211, Vakar) Belarus was on its way to becoming a major industrial region in the USSR.
Belarus specialized in many types of industry. The majority of the industry that was built up in Belarus after the war centered around the production of heavy machinery. Production focused on tractors, trucks, machine tools, and precision instruments. Other sectors also included computers, synthetic fibers, plastics, petrochemical products, and mineral fertilizers. (Zaprudnik, 114) These types of industries, however, were not beneficial to the people of the country for a few reasons. First, Belarus' largest industry, tractors, did not help to improve the agriculture of the republic because the land was so destroyed from the war that even the best equipment or fertilizers could not increase agricultural output. This affected the entire republic, for decreases in agricultural output meant less food for people throughout the country, not just in rural areas. Second, "the economic growth of the republic was achieved at a considerable price: both environmental requirements and social needs were neglected. In the cities, construction of high-rise apartments buildings, factories, and plants failed to take into account the necessary ratio of social services and transportation facilities." (Zaprudnik, 115) Pollution built up, factories took over residential areas, and cities became congested. Although industrial output was high, the standard of living was not increasing because social conditions were deteriorating. The industry in Belarus did not serve to increase the social welfare of the Belarusan people, but to increase the industrial and political might of the Soviet Union in the world arena.
The rebuilding and repair of the economy is obvious when analyzing trends in industrial output. Soviet planners were clearly interested in industrial growth, and they achieved this in Belarus. They boasted their success by announcing to the public that "the vitality and strength of the Soviet system proved strikingly manifest in Belorussia's rapid recovery." (Vakar, 211) What they failed to show to the Belarusan public and even the West, however, was the continued devastation of the countryside that had been neglected after the war. When assessing the performance of the Soviet-type economy in Belarus on the whole, the terrible situation in the rural areas must be taken into account.
Official Soviet documents cover up much of the suffering in the countryside. The Soviet government did not allow the world to know that "ten years after the expulsion of the Fascists, people still huddled in dug-outs, lacking the most essential items." (Zaprudnik, 113) "The villages lacked amenities, roads, educational and cultural establishments, and was regarded by the authorities as little more than a supplier of goods to the town." (Marples, 21) One Soviet source admitted: "Many party and soviet organizations weakly led agriculture, and soviet organizations failed to procure a high tempo for the reestablishment and development of collective farm production." State policy neglected Belarusan agriculture and those who made a life from it. "For the authorities, postwar recovery lay in the development of the city and the city industries." (Marples, 21) The circumstances in the countryside leaves the impression that after World War II, "except for the privileged group, the Belorussian people still live in the squalid poverty of old, accentuated by drastic regimentation of labor." (212, Vakar)
It is clear that the Russification and industrialization of Belarus turned the country into an industrial center. The post-war economy was based predominantly on industry, and this trend would continue for decades. Industrial output increased and the industrial sector grew rapidly in the late 1940s and early 50s. Throughout the Cold War, Belarus was a main Soviet producer of tractors, fertilizers, and synthetic fibers. However, the success of the economy can be gauged not only by industrial growth and strength; other factors must be accounted for. When considering the conditions in rural Belarus, conditions which were hidden to the world by the Soviet government, it seems as if the economy was not as successful as the central planners would have liked for it to be. The Soviet-type economy focused on industrial success while forcing the population, especially the peasants, to constantly sacrifice and suffer. This trend was found throughout the USSR, but was predominant in Belarus. The preferential treatment of industry throughout the Cold War, but especially in the post-war era, would eventually contribute to the weakening rather than to the strengthening of the economy.
Marples, David R. Belarus: From Soviet Rule to Nuclear Catastrophe. St. Martin's Press. New York.
Vakar, Nicholas P. Belorussia: The Making of a Nation. Harvard University Press. 1956.
Zaprudnik, Jan. Belarus: At a Crossroads in History. Westview Press, 1993.
Growing a Modern Economy: The Economic Development of 20th Century
by Amy Johnson, March 2001
Throughout the 20th century, the country of Belarus has undergone a series of economic upheavals, all caused by changes in the political
climate in which it exists. Since the time before Stalin to the end of the Soviet Union, this agrarian
society has ridden the waves of fortune with its parent country. Recently, however, it has been forced to stand on its own and has fallen behind more industrialized countries such as Russia. This country presents a vivid example of a small nation trying to grow a modern economy. For much of the 20th century, Belarus was closely linked to the rest of the Eastern Block countries. It enjoyed a relatively stable economy throughout most of the time, partially caused by the western half of the area being part of Poland and the rest part of the Russian Federation, two larger, stabilizing entities.
Political reforms known as the New Economic Policy helped liberalize the economy, allowing for a large amount of prosperity in the 1920's, only to be blackened when Stalin began his campaign to collectivize agriculture in 1929. His attempts to incentivize workers to leave the farms and move into the factories caused turmoil in the fields and a disruption in an otherwise established way of life. More importantly this forced societal shift put an inordinate amount of strain on the fledgling socialistic food distribution network, causing shortages of agricultural goods throughout the country. The resulting tension from the intense famine led to the revolts against Lenin in 1921, landing many of the farmers, intellectuals, and nationalists in prison, further destabilizing the region. Despite the sharp disruptions these activities caused, Belarus managed to regain a fairly stable equilibrium.
This equilibrium lasted until the Second World War, was sharply interrupted, and then re-established again thereafter. The unification of eastern and western Belarus after the war in 1945 created an influx of immigration, increasing economic growth and activity. Following the World War came the Cold War. For most of these years, the economy of the area was combined with that of the Soviet Union, with information regarding its economy locked forever behind the politics of the Iron Curtain. All of this changed with the fall of the Soviet Union. Previously considered one of the strongest and most stable economies of the Soviet Union,
Belarus has been slow to embrace a market economy, even resorting to socialistic practices to achieve growth. In response to high inflation, falling GDP and GNP, and increasing population growth, the President of Belarus, Alyaksandr Lukashenko, instituted a new reform of 'market socialism' in 1995. This new policy turned more power over to state and government officials who imposed strict administrative controls over prices and currency exchange rates. The government also expanded its right to interfere with the management of privately owned small businesses. This caused an environment antagonistic to small businesses, and in turn hurt domestic and foreign investment. Following with the goals of this policy, price controls were set on both goods and consumer prices causing shortages and a black market. Also during this time, to pay off foreign and domestic debts resulting from previous borrowing, the Belarusian ruble was devalued from a 1-to-1 Russian to Belarusian ruble exchange rate in 1992 to a 4-to-1 ratio in 1995. This caused a devaluation of the ruble on the international market, with the US exchange rate plummeting from a 1-to-740,000 US dollar to ruble ratio in 1992 to a 1-to-11,500 ratio in 1995. These practices also dampened trade both in international and local markets. In desperate hopes for recovery from its economic deterioration, Belarus applied for US financial aid and economic development assistance. Because the goal of this US AID program is to promote stability and a market-oriented economy, the political atmosphere has once again hindered growth. The government's slow rate of political restructuring has caused the country to be 'red-flagged' as a lagging reformer among the New Independent States, increasing the pressure on both sides. Despite the tension, the program has helped in some areas where US AID workers have promoted small-scale privatization, demonstrating the benefits of a market-driven economy. Trade patterns remain another dilemma for this weak economy with its main trading partner as Russia, accounting for over 50% of exports and imports.
Currently, Belarus remains self-isolated from the West and its large, open markets. Further economic problems stem from two consecutive bad harvests ('98-'99) and continuing trade deficits. With most of the former Soviet countries having economic difficulties as well, the best way to chart Belarus' progress is by comparing it to another former Soviet country, Russia. The GDP in Belarus is fueled primarily by agriculture, industry and services, which compromise 23%, 28% and 49% of the economy, respectively. This breakdown is a sharp contrast to Russia's, which has respective percentages closer to 8.5%, 38%, and 54%. These percentages could account for the differences in types of exports with Belarus primarily specializing in agricultural goods (fertilizers, grain, and potatoes) and Russia focusing more on industrial goods (petroleum products, chemicals, and metals). In contrast to the near hyperinflation levels that torment Belarus (as high as 295% in 1998), Russia maintains inflation levels on average of 20% to an unusual high of 86% in 1998.
Despite lower levels of inflation, a wealth of natural resources, a high population of educated people, and a diverse industrial base, the Russian GDP has continued to contract since the split, and has fallen by nearly 45%. However, the Belarusian GDP has actually shown improvement since its significant but expected drop after the fall of the former Soviet Union. This can be credited to the small-scale privatization efforts that have caused growth in the real GDP of up to 7% annually. These numbers indicate that despite the turmoil, the steady, stable economy that Belarus enjoyed at the beginning of the 20th century may once again return. Throughout the century, Belarus has survived through political change and upheaval, each time finding its way back to a relatively constant economy. Despite its difficulties, the information above shows that better times may once again be slowly returning to an economy that is rooted in the soil.