Minsk Market Reflects Hard Times for Belarus

There is only one queue at Minsk's main open air food market and it's a long one: dozens of people, mostly pensioners, lining up to buy unripened tomatoes that are 30 percent cheaper than the regular ones.

"I can't survive any longer on my pension," says Lyudmila, 70. "Before, it was me who helped my children but now it is the other way round -- I have to rely on them."

President Alexander Lukashenko, an authoritarian leader in power since 1994 who runs the economy on Soviet lines, raised public sector pay by 40 percent last year in the run-up to an election in December which handed him a fourth term in office.

But these pay rises, along with government loans pumped into the economy, only served to increase imports which significantly weakened the former Soviet republic's current account.

Higher prices for Russian oil didn't help either.

The result is a currency crisis which is closing like a vice on daily life here.

The Belarussian rouble has lost more than half its value against the dollar since early April. The central bank has abandoned attempts to support it, having burned a quarter of its foreign currency reserves trying to do so in previous months.

This means prices of imported goods ranging from vegetables to detergents have skyrocketed and some items have all but disappeared from shops. Vendors change prices every day.

People like Lyudmila spend hours every day looking for food bargains and often having to settle for second best -- in her case green, unripened vegetables imported from Russia.

"Prices (of imported fruit and vegetables) have risen by 30 to 50 percent," says Dmitry, 22, an economics student and potato vendor, who like Lyudmila did not wish to give his last name for fear of retribution by the authorities.

"People are just surviving," he says. "I've started buying at discount shops and hunting for bargains. I can no longer afford the same lifestyle as before."

An independent newspaper, Belgazeta, has begun to run a shopping guide telling its readers where to buy familiar Western brands of shampoos or dishwashing liquid -- many of which are now hard to find. Medicines too are in short supply.


Those who still have some savings are trying to protect them by buying foreign currency -- but the flow of dollars around the country is fast drying up.

Belarus operates a multi-level exchange rate system. Exporters sell 30 percent of their revenues at the official rate of about 3,100 roubles per dollar to the central bank which then resells the foreign currency to key importers.

Other businesses use the interbank market where the rouble traded between 8,000 and 9,000 per dollar on Thursday.

Finally, the rate at cash exchange points where ordinary people can buy and sell foreign currency is 4,500 roubles per dollar -- which means very few people are willing to sell while hundreds are queueing up in hopes of buying dollars or euros.

Barred from forming long queues, Minsk residents have switched to "virtual" ones, checking in before and after work to get updates on their position in the line.

Others have turned to the Internet.

A group of web developers have created prokopovi.ch, a website where users can post currency buy and sell offers and then agree to meet in person to execute the deal.

The website, which says it facilitates millions of dollars in deals every day, is named after Belarussian central bank chairman Pyotr Prokopovich. He has become the butt of jokes for going on prolonged sick leave at the peak of the crisis.

Many Belarussians, though, are not in the mood for jokes. Potato vendor Dmitry said he and his friends had already tried to stage a protest against rising fuel prices but were stopped by the police "for routine checks".

Prices are likely to rise further, and he says he and his friends are preparing for another rally: "The day they raise fuel prices, we will protest."

"The price of Lukashenko's political ambitions is too high," says entrepreneur Konstantin. "He has pushed the whole country into chaos." (Writing by Olzhas Auyezov; editing by Richard Balmforth and Tim Pearce)