By Terance Walsh
Impunity Watch Reporter, Europe
EDINBURGH, Scotland — The Royal Bank of Scotland, one of the United Kingdom’s largest banks, declared that it would cease finance operations in Belarus in protest of Minsk’s continued human rights aberrations.
RBS decided to stop doing business with Belarus after human rights groups Free Belarus Now and the U.K-based Index on Censorship applied pressure to the bank. The two groups criticized RBS’s dealings with Belarus, leading to a decision by the bank to break with the Belarusian government in favor of opposition to the Belarusian government’s abuses of power.
In an official statement RBS said, “Given sanctions, the deteriorating political situation in Belarus and the fact that it has reneged on key elements of the [International Monetary Fund] programme, RBS has ceased any type of capital-raising for or on behalf of the Belarus Republic, and we have no plans to change that position until these issues have been resolved. In assessing where we do business, we have a responsibility to consider a number of factors, including social and ethical issues and compliance with the letter and spirit of all international sanctions.”
Head of Advocacy at Index on Censorship Mike Harris expressed excitement at RBS’s decision. “We’re delighted that RBS has heeded our calls to stop acting as a broker for authoritarian President Alexander Lukashenko. This couldn’t come at a more crucial time. The government of Belarus needs nearly $1 billion a month in foreign capital. RBS has sent a clear signal not to risk investing in a regime that violates fundamental human rights and may not last.”
Earlier this year RBS took part in a deal to issue more than $800 million in the Belarusian government’s Eurobonds, a deal essential to Belarus’s financial survival. RBS was the only British bank doing business with Belarus at that time. The European Union has already imposed sanctions on Lukashenko and several of his key officials, including a freeze on their assets and a travel ban as well as an arms embargo.
Lukashenko has come under fire from the West, especially after being dubbed “Europe’s last dictator” by George W. Bush’s administration. Since coming to power about twelve years ago he has styled himself as an authoritative leader and does not shy away from this image. “An authoritarian style of rule is characteristic of me, and I have always admitted it,” he said in August 2003.
In 1996 he disbanded Parliament, which was seeking to impeach him, and put in place a new hand-picked Parliament. Recent criticism of his regime has arisen from his crackdown on political opposition after his disputed electoral victory last year. In a foreboding declaration he warned that opposition protestors would be treated as “terrorists,” promising that he “will wring their necks, as one might a duck.”
Belarus is currently facing an economic and financial crisis, which makes the loss of financing from RBS especially crucial. Lukashenko ramped up spending prior to December’s elections, which disrupted Belarus’s balance of payments. The Belarusian ruble has experienced steady deprecation relative to the dollar. The country is experiencing food shortages due to Russia taking advantage of Belarus’s weak currency by buying Belarusian meat. The country depends on foreign financing and has already been cut off from financing from the west due to sanctions. The IMF has refused to assist Belarus until it takes measures against its credit and inflation problems. As Belarus continues to face a bleak economic forecast and dried-up credit sources, Lukashenko will be forced to comply with foreign pressure to improve their human rights practice if he wishes to attract financing from the West.
For more information please, see:
RIA Novosti — Lukashenko Tries to Rescue the National Currency and Himself — 31 August 2011
BBC — RBS Agrees to End Work for Belarus — 29 August 2011
Financial Times — Belarus: RBS Jumps Ship — 29 August 2011
Radio Free Europe/Radio Liberty — British Bank Halts Belarus Work After Criticism — 29 August 2011
San Francisco Chronicle — Belarus Runs Out of Meat as Russians Exploit Currency Plunge — 29 August 2011
USA MarketNews — RBS Concurred to Conclude Work for Belarus — 29 August 2011
BBC — Profiler: Alexander Lukashenko — 9 January 2007
