How the government’s actions affected negatively the IT industry in Belarus

On August 9, the presidential elections were held in Belarus. According to the official results, Aleksandr Lukashenko won for the sixth time in a row. His “election victory” was accompanied by long-term internet disruption, violent dispersal of protesters against election fraud and violation of constitutional rights, searches in IT companies and arrests of its employees. Authorities’ brutality on its own people has become decisive for the technology sector and the country’s economy as a whole.

AIN.TECH decided to find out what is happening with IT industry of Belarus right now. 

ІT before the elections 

Mutually beneficial tolerance – that is how relations between IT and the state can be characterized before the elections. The Belarusian tech sector is one of the key sectors in terms of its impact on the country’s economy and its place on the international scene. For Lukashenko, it is about 6.5% of GDP and foreign investment, and for the tech community it means non-intervention of the government.

In 2005 the state stimulated the creation of the country’s main IT platform – High Technologies Park, a special tax and legal regime that provides companies with benefits and special working conditions. HTP residents throughout the country are exempt from corporate taxes until 2049, including VAT and income tax, for example. The relocation of IT companies to Belarus and the employment of foreigners have also been considerably simplified. As of 2019, more than 750 companies were registered in the park, and their export value amounted to $2 billion.

The conditions created for the industry contributed to making Belarus the large outsourcing and product development centre which is known for its high-level specialists and relatively low prices. Such HTP residents as EPAM Systems, Wargaming, Viber, MSQRD, which was acquired by Facebook in 2016, and PandaDoc have only strengthened Belarus’ reputation as a country with a favourable environment for IT development.

But, as the architect of Decree No.8 “On the development of the digital economy” Denis Aleinikov emphasizes, Hi-Tech Park has been developing all this time rather due to the “implied agreement on the untouchability of the industry” rather than to the real government support. This “ecosystem balance” between the tech sector and the state was irretrievably disrupted on election day.

ІT after the elections 

On August 9, the problems with both mobile and fixed Internet arose all over Belarus. Instagram, Twitter, Facebook were blocked, Telegram worked through a combination of Wi-Fi and VPN only. There was no access to some information resources, websites of human rights organizations, including the independent observation site zubr.in and the Golos IT platform, and the search engines Google.by, Yandex.by worked intermittently.

While Lukashenko confidently denied the government’s involvement in the Internet shutdown, Belarusians started to go out with peaceful actions against rigged elections. The authorities reacted by beating up the participants, detaining and arresting them, and searching. In just four days of protests, more than 160 employees of IT companies were detained, and Minsk offices of Yandex and Uber were sought through by the representatives of the Organized Crime Department of the Ministry of Internal Affairs for unknown reasons. After that, other companies transitioned employees to work remotely being afraid for the safety of their employees. This is what Viber and Wargaming have done.

The events over the last month made many Belarusian companies and specialists decide to relocate. This is not only about the financial losses of business, although they are enormous, but also about the absence of the supremacy of law and unpredictability in the country. All of the mentioned above demoralizes people forcing them to leave Belarus. Game development company Gismart has already made a decision in favour of temporarily relocating employees to its Kyiv office, Dmitry Lipnitsky, CEO and co-founder of Gismart, told AIN.UA in his interview.

PandaDoc case

The founder of the PandaDoc startup Mikita Mikado, together with the Belarusian Solidarity Fund, launched the Protect Belarus financial initiative to help law enforcement officers who want to leave the job. The project began to gain momentum and within a month 942 people applied for support, 132 received payments for a total amount of € 198,000.

The government decided “to punish” PandaDoc for initiativity, although the company itself has nothing to do with the project. Two weeks after its launch, the Financial Investigation Department searched PandaDoc’s Minsk office, detained 7 people, some employees were searched in their houses. After that a criminal case was initiated against 4 PandaDoc employees for embezzlement of budget funds. They were placed into custody for 2 months, according to the SavePandaDoc website.

“Watching this hundreds, of Belarusian tech companies are opening offices abroad and moving. Tens of thousands of Belarusian tech workers are planning to move out. Thousands already have. This case is not only about saving four innocent people. It is about saving Belarusian IT sector. #savepandadoc = #savebelarusit”, summarized Mikado.

«Paradise for IT talents»

While Lukashenko is sincerely surprised about the dissatisfaction of specialists with the “paradise for IT talents” he has created, the OMON continues to arrest them, the FID – to terrorise companies with searches, initiate criminal cases against employees. This is the reality that is confronted by the tech sector and that forces it to make important decisions about closing or moving its businesses to other countries in the shortest possible time.

And yes, Ukraine is now at high-speed mode preparing opportunities for Belarusian specialists and companies to settle down here. More details about the conditions of moving IT specialists to Ukrainian cities can be found in the guide prepared by the Ministry of Digital Transformation of Ukraine, specifically about relocation to the capital can be read here.