(Bloomberg Businessweek) -- For the past decade, the strangest thing has been happening in Minsk: Despite the authoritarian rule of Alexander Lukashenko, Belarus’s tech companies have prospered. The country’s programming chops, combined with some of the lowest labor costs in Europe, helped game designers and outsourcing shops win customers around the world. Kirill Golub, the co-founder of startup investing club Angels Band, says that’s under threat.
After a disputed presidential election, police shut down the Internet for three days and brutally attacked demonstrators. The offices of prominent tech companies such as Russian search engine and ride-hailing service Yandex NV and document automation developer PandaDoc were raided. Golub, 41, was arrested near his apartment in downtown Minsk.
“If the president holds on to power,” Golub says, “the IT sector is dead and buried.” He was released from jail after three days.
As Lukashenko arrests opposition leaders and turns to neighboring Russian President Vladimir Putin for support against the biggest challenge to his 26-year rule, an increasing number of tech workers are moving abroad. Ukraine has been a top choice, according to Golub. A prolonged outflow could undermine Lukashenko’s positioning of himself as the defender of the economy.
Belarus’s IT sector has boomed against the backdrop of an economy dominated by state-controlled agriculture and heavy industry inherited from the Soviet Union. Information technology makes up about 6.5% of gross domestic product and was responsible for half of the growth last year, according to Dmitry Krutoy, the former economy minister who’s now deputy head of the presidential administration.
The Belarus Hi-Tech Park, a hub on the eastern edge of Minsk, has grown to nearly 700 companies since opening almost 15 years ago. About 60,000 people work there, earning $2 billion annually in exports. Many of the workers are relatively young, well-traveled, and can earn wages more than four times the national average of almost $500 a month. And they’re mobile.
Friday evening, several dozen workers staged a short-lived protest action near the tech park’s campus before police swooped in.
Pavel Liber, previously an apolitical top local manager at EPAM Systems Inc., fled to Ukraine after he—independent of the IT-outsourcing firm—helped design a program to expose voter fraud.
“At first, the authorities didn’t take us seriously,” Liber says by phone from Kyiv. “But as the number of app users surged, by the end of July, me and a team of about 40 had to leave Belarus for security reasons.”
Tech entrepreneurs rose up quickly against the police’s initial brutal response to protests that erupted after Lukashenko claimed a landslide victory on Aug. 9. Within days, executives whose companies employ about 20,000 people signed an open letter warning that the harsh crackdown—at least five people were killed and about 7,000 detained—could lead the industry’s mobile, in-demand workers to quit the country.
No companies have told the tech park they are leaving, according to its press service.
The signatories included Arkadiy Dobkin, founder and chief executive officer of U.S.-listed EPAM Systems. Victor Kislyi, the billionaire game designer of World of Tanks, and Yuri Gurski, an investor who has sold Belarusian apps to Facebook Inc. and Alphabet Inc., also signed.
EPAM, the largest IT company in Belarus, may relocate a limited number of employees but isn’t yet planning a large-scale move, according to its press service. Russia’s Yandex has evacuated some employees in Minsk, the Bell reported, citing unidentified people familiar with its plans.
The trend may grow. Female-health app Flo, which has 200 employees in Belarus, is considering moving them to Lithuania, Warsaw, or London, according to founder Yuri Gurski.
“No one wants to live in a North Korea in the middle of Europe,” says Mikita Mikado, the San Francisco-based head of PandaDoc, which is creating a plan to move its 250 programmers in Belarus if the situation deteriorates. “There’s no borders at all for IT engineers. They can find a job anywhere.”
Read more: Belarusian Officials Shut Down Internet With Technology Made by U.S. Firms
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