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Lukashenko's crackdown threatens Belarusian 'Silicon Valley'

2020-09-04T22:00:17.977Z


Tech companies, which underpin a prominent sector in Belarus, consider leaving the country amid protests and alarmed by police violence


Tractors and video games.

That has been one of the business cards for the outside of the Belarusian economy in recent years.

A Soviet-style model, with the majority of companies controlled by the state and famous for their cereals and heavy machinery, was added 16 years ago by a flourishing new technology industry that today accounts for almost 6% of its GDP.

Minsk's avant-garde high-tech park, a kind of Belarusian 'Silicon Valley', attracted many companies and entrepreneurs, seduced by a country that offered stability and substantial tax benefits for the sector.

But today, the crackdown on protests, attacks on human rights and police brutality against protesters demanding democracy in this European country have also impacted the prominent area, until recently one of its greatest prides.

So much so that some of these companies are considering leaving Belarus.

Some are under the direct focus of the authorities.

Like PandaDoc, a California-based software company whose offices in Minsk have seen multiple records this week after its director, Mikita Mikado, a Belarusian, who lives in the US, started a program that offers financial assistance to members of the security forces to park their uniforms and "side with the people."

A sector until recently silent, which has not only now placed itself at the head of those who demand changes, but is also launching applications and projects of all kinds to support the citizen movement that demands the departure of Aleksandr Lukashenko.

The Viber messaging app or the software engineering company EPAM have major operations in Minsk.

Also Wargaming, creator of the popular video game World of Tanks.

At the state-owned Hi-Tech Park in Minsk, co-founded in 2006 by Valery Tsepkalo, today one of Lukashenko's best-known opponents and exile, there are already more than 880 registered companies and 58,000 employees.

But the landscape of what is considered one of the most important technological hubs in Central and Eastern Europe may change very soon.

Two weeks ago, more than 2,500 Belarusian or country-based technology executives, investors and developers wrote a letter to Lukashenko calling on the authoritarian leader for new elections and an end to police violence.

"Emerging companies are not born in an atmosphere of fear and violence," they say in the letter.

"In the near future we will begin to observe the massive departure of specialists abroad," they remarked.

The blow can be very hard.

The Hi-Tech Park in Minsk is one of the country's economic success stories: the year generated more than 2 billion in sales abroad.

Information technology accounts for 22% of Belarusian exports.

But Lukashenko has taken power and even though the police repression is no longer massive, the strategic arrests and reprisals do not stop.

Until this turbulent summer, Viber, controlled by Japan, had plans to double its 120 employees in Belarus.

Today, the project has not only been parked, but the company is one of those that could leave the country.

“We would like our Belarusian colleagues to be able to live and work in their home country without this being a danger to themselves and their loved ones,” says Anna Znamenskaya, Growth Director at Rakuten Viber.

“If we don't see this, we will probably have to make a decision and offer our current employees to move to one of our offices in Russia, Ukraine or Western Europe.

And our hiring will focus as much as possible on finding new employees in other countries, ”acknowledges Znamenskaya.

As employees of many other technology companies, five of Viber's workers have been arrested since the beginning of the mobilizations, two of them did not even participate in the protests and one was seriously injured during the arrest, explains the company's growth director.

"It is emotionally very difficult," she continues.

The operation of Viber, with 6.5 million users in Belarus, was also affected by internet outages that the government has ordered intermittently during protests.

The interruptions in the first three days of mobilizations cost the Belarusian economy nearly $ 170 million, according to the international non-governmental organization NetBlocks.

Other companies such as the giant EPAM, Yandex - which has also experienced records in its offices - or Wargaming, which was founded in Minsk, prefer not to comment on the situation.

However, some employees have already asked to move.

83% of PandaDoc workers want to relocate, according to an internal survey.

And the European-Ukrainian technology association EASE, which helps specialized relocation, received more than 350 applications from Belarusians in August.

Some of its top professionals have already left.

Like Pavel Liver, top executive of EPAM and one of the founders of the Golos platform, to avoid electoral fraud, who has been exiled to Ukraine.

The Lukashenko government, which insists the Aug. 9 presidential elections were fair, has avoided commenting on tech companies.

“We cannot work, there is fear of going out into the streets in a country where a president runs with a rifle, adolescents and peaceful citizens are beaten, detainees are tortured, there are disappeared and military technicians are all over the city. ”, Highlights Elena Sokolova, founder of the

Internet of Things

digital interconnection project development company

and one of the signatories of the open letter.

"The business of new technologies is paralyzed here right now, nobody is in a position to start a new project at a time when it is not even known what will happen tomorrow," he continues.

The social mobilizations and the political crisis is on its way to reaching its fourth week.

And in this breeding ground there are already others who have seen a business opportunity.

Technology centers and parks in Ukraine, Poland, Kazakhstan, Croatia or Estonia have begun to see exits and are testing the waters to attract some of the companies with offices in Minsk to their countries.

Also Russia, where a few months ago it was announced that new technology companies would have significant tax exemptions.

In Belarus, tech companies pay 9% tax compared to 13% for other businesses.

Sokolova believes that if the situation continues like this there could be a real rout: "If the regime does not change, only organizations that provide services to state institutions and companies will remain in Belarus."

Source: elparis

All news articles on 2020-09-04

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