Financial (and Other) Lessons from Current Crisis in Belarus

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If you’ve been following the news, you probably know that Belarus (where I grew up) is currently going through societal upheaval, following recent elections. Several readers have reached out to me asking about my family, something I appreciate.  In this post I won’t be focusing on the political aspect of it all. You can google it if you so wish. Instead, I wanted to write from the perspective of an immigrant, and what it’s like to watch your “home” go up in proverbial flames, albeit from afar.

From following the news, I knew something major was going to happen this August. The situation in Belarus was likened by one journalist  to a powder keg, so it was only a matter of time till the whole thing blew up. But it was even worse than I thought it would be. In fact, even though it’s been two weeks, I’m still having a hard time processing everything.

Following the elections on August 9th, the government turned off the internet and blocked all international calls. For three days there was no way for me to contact my family. None. It’s something we in the modern society take for granted. I know I did. Before that, almost every day I would get photos of my mom’s garden, her pride and joy. I rolled my eyes each and every time I saw yet another big cucumber. But then the photos stopped.

Despite not having internet, many people managed to use VPNs. Soon, Twitter was flooded with photos showing horrific violence on the streets. It was clear that security forces were given a carte blanche to beat, rape, torture  and even murder people. These sadistic zombies literally went on a brutal rampage against their own neighbors.

Nothing like this has ever happened in my country, at least not in my lifetime. As of now, some were killed and at least 80 people have disappeared without a trace. Many of those who survived were viciously tortured in prisons.

What’s even more disturbing is that many of those who suffered were just random passerby’s, who were not taking part in protest. Since my sister lives in the center of the city, I was very concerned. And indeed, later she told me that she was afraid to even go to the store since police were grabbing people off the street and taking them to prisons. Some never to be seen again.

Fortunately, so far, my family is fine. However, this is only the beginning, I’m afraid. There is a standoff between two sides, and I fear it will only escalate going forward. A few days ago, El Presidente was filmed coming off a helicopter carrying AK-47. Near him, his 15-year old son, also armed. The message? Over my dead body.

Not surprisingly, the brutality against ordinary unarmed citizens backfired spectacularly. Like I said, Belarus society is not used to this sort of thing. When people were brutalized on the streets, some older ones have said it reminded them of invasion by Nazis.

Many people are protesting every day, and the whole team of government-run TV channel quit. Alas, they were promptly replaced by Russian propagandists. It’s very easy to tell due to Moscow accent. They also refer to the country as Belorussiya instead of Belarus, a dead giveaway.

The propagandists are painting a false and disturbing  narrative that most people in Belarus want to become part of Russia. Soon there were many images of “big” rallies with Russian flags and St. George’s ribbon. It would be hilarious if it wasn’t so scary (looking at you, Ukraine).

So, very soon I might become a citizen of Mother Russia. Yay? Or there could be a civil war instead of invasion. Or both. The other day my mom said she woke up thinking she heard Russian tanks entering the city. We’ve discussed the possibility of them fleeing to Lithuania, though my parents said they will stay put no matter what. This is their home.

Throughout these two weeks, there were some funny moments as well. On Reddit, a lot of folks were surprised that Belarus citizens pick up the trash after protests and take the shoes off when stepping on a bench. Someone said Belarusians are the Canadians of Europe.

One guy brought a trained goose. The bird was walking around holding a sign “This goose is for free Belarus.” A few people dressed as Batman and Spiderman, and were giving out energy bars to help fight the mustached super villain. 🙂 Belarus sense of humor is truly one of a kind, and I really miss it.

It was neat to hear songs by Victor Tsoi who died thirty years ago.  He was to Soviet Union what Bono is to Ireland. I remember my dad blasting his songs on weekends when I was a kid. It seems like it was yesterday. Here is his extremely popular 1988 rock anthem “Changes” on YouTube

Unfortunately, I won’t be able to go home anytime soon. Belarus is rapidly turning into a North Korea of Europe, and it’s simply not safe for me (or anyone else). I’ve told my parents that even if one of them falls ill, I can’t take a chance. They understood.

Financial consequences

It seems silly to talk about finances when people are tortured and killed, isn’t it? Nevertheless, even in times of war folks still need to eat. The current financial situation has directly contributed to the current crisis, and the crisis itself will only make things worse. Here is a good article for economists that explains the nitty-gritty. 

I’ve been watching the financial developments and noticed that no Belarus bonds were sold following the election. Torturing and killing citizens doesn’t exactly inspire confidence in potential investors. Spiraling debt means that the government is robbing Peter to pay Paul, so to speak. In short, it was clear to me that devaluation of Belarus ruble is imminent. And indeed, that’s what happened. It’s almost impossible to buy dollars at the moment, and prices of everyday goods are going up. Things will only get worse.

Liquidity 

I really wish I talked to my mom about money. Here is the thing. I just assumed my parents are totally broke, which was true for a good portion of my life. Turns out, they were able to save up $7k over the last five years and put it in a CD in a national bank. In Belarus, that sum is a small fortune. I told her to cash it out immediately, while she still can. Never mind the penalties.  The problem? It’s the type of CD that you can’t access before maturity. And it matures this October.

So, two things may happen here. The government might freeze all the foreign currency accounts in a near future. A less scary scenario: she will still be able to cash it out via Belarus rubles, but following official (unfavorable) government-set currency exchange rate.  So, even if the account survives, my parents will most likely lose money.

My mom said she wanted to have an emergency fund, which makes a lot of sense. However, she was seduced by a higher interest rate in exchange for loss of liquidity. I so wish she would talk to me first, but it’s too late now. I’ve said before that emergency fund should be invested in a FDIC-insured account that you can access immediately if needed.

Diversification

While this isn’t a good advice for Americans, my parents should have kept at least half of their money at home. I’m not too familiar with cryptocurrency, but that’s another option. I would never trust all of my savings to a bank based in Belarus due to potential volatility.

My mom told me that surely they won’t confiscate the money since she has a signed contract. Right. The government that is OK with tortures and murders of its own citizens? I think all bets are off at this point, unfortunately.

This actually made me think that “investing” in flexible points rather than cashback can be a good strategy for those of us based in US. As they say, don’t put all of your eggs in one basket. Plus, UR points can be cashed out, and MR currency can be used on gift cards in the worst case scenario.

Focusing on the basics

One silver lining that came out from this terrible situation is that it brought me closer to my family. I have been calling them every day and I appreciate mom’s photos of cucumbers now more than ever. I don’t know what the future holds but for now, they are OK, and that’s all that matters.

We’ve reminisced about the early nineties when my mom was making $80 dollars a month and my dad was laid off. She reminded me that we never went hungry, so she is not all that worried now. My mom  is an eternal optimist, and nothing can get her down. This is something I very much admire. On the other hand, my dad is freaking out. I’m a combination of both of my parents. Obviously, as long as there is some sort of banking system in place, I will help them out financially. They are going to be fine. I hope.

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