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The people of Belarus have plenty of reasons to be unhappy with President Alexander Lukashenko. The close economic ties he forged with Moscow are inflicting severe pain on Belarus as Russias economy stumbles. The Kremlins actions in neighboring Ukraine are a reminder that good relations with President Vladimir Putin can quickly turn bad. Even before the Ukraine crisis, Belarus suffered from a feeble economy and widespread human-rights violations under Lukashenkos leadership.

Surprisingly, though, the recent turmoil appears to have shored up support for the authoritarian president and for his policy of heavy economic dependence on Russia. A recent poll shows that more than 55 percent of Belarusians say they trust Lukashenko, up from less than 40 percent last year. An increasing number of Belarusians say they believe their country is on the right track, according to the poll by the Independent Institute of Socio-Economic & Political Studies in Minsk.

Nearly half of respondents in the poll said that if given the choice, they would choose economic integration with Russia over membership in the European Union. In a poll a year ago, the situation was reversed, with nearly half favoring EU membership.

How to explain this, when the Belarusian economy has slowed to a crawl, inflation is in double digits, and fast-falling oil prices are threatening the countrys main source of cash, the refining and reselling of Russian oil?

Lukashenko has benefited from the Ukraine showdown for at least three reasons:

He has deftly played both sides. After Russias annexation of Crimea, he appeared to side with the government in Kiev, saying that he favored a single and unified Ukraine. At a press conference last month, however, he accused the Ukrainian government of provoking Russias action by banning the Russian language and threatening [the[ lives of these people in Crimea. Lukashenko also hosted peace talks in Minsk, burnishing his image with countrymen as a statesman. He has even proposed sending Belarusian troops to Ukraine as peacekeepers.

Most Belarusians get their news from Russian media outlets, which overwhelmingly portray the annexation of Crimea in a positive light and blame the fighting in Ukraine on the government in Kiev and its Western allies. The fear of similar mayhem in Belarus has created a real demand for stability, a firm hand, Valery Karbavelich, a Belarusian political analyst, says in a recent interview with Transitions Online, a newsletter that covers the region. The economy was a crucial factor in shaping public attitudes toward the government until recently, but now it doesnt play as big a role, he said.

The situation has effectively neutralized Lukashenkos political opponents, even those who were calling, a few years ago, for a quick overthrow, says Yaraslau Kryvoi of the Ostrogorski Center, a London research group on Belarus. They fear that if the authoritarian president were weakened or even ousted, Belarus could become the next Crimea. Many people are saying, `Lets just stick with Lukashenko. Well deal with democracy later, Kryvoi says.

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Ukraine's Turmoil Is Helping Belarus Strongman Lukashenko

A woman stands at an ATM that doesn't work outside a Ukrainian bank in Donetsk, eastern Ukraine, Tuesday, Nov. 25, 2014. Money is running short in the rebel heartland since the government announced this month that it will suspend banking services as it piles on the pressure. Almost all ATMs have stopped working and the remainder are expected to stop operating over the next two weeks. (AP Photo/Balint Szlanko)(The Associated Press)

DONETSK, Ukraine For hours, small crowds in Donetsk huddle hopefully in the cold around cash machines that never get filled, as artillery rumbles in the distance.

Money is running short in the rebel heartland since the government announced this month that it will suspend banking services as it piles on the pressure. Almost all ATMs have stopped working and the remainder are expected to stop operating over the next two weeks.

The move is part of Ukraine's plan to suffocate its separatist foe, now that its costly military campaign has foundered. Authorities say they are also withdrawing all state services from rebel areas, although hospital and school workers in the rebel stronghold of Donetsk say it has been a while since they last saw funding anyhow.

Yet if the government of President Petro Poroshenko government hopes to turn people in eastern Ukraine against separatist leadership, the evidence on the ground suggests the strategy may only be hardening their resolve.

"What Poroshenko is saying to us is: 'You are no longer Ukrainians. You won't get pensions, you won't get social payments, When you croak, then we'll stop this war against you,'" said Donetsk retiree Georgy Sharov. "But I don't want to go to Ukraine and beg for their mercy."

The cash lines have typically formed in front of cash machines belonging to state savings bank Oshcadbank, which handles pensions and social support payments.

"Even they don't always have money," said Donetsk resident Sergei Smotovsky, standing outside a branch of the bank. "The worst thing is that not only can you not get social payments. You can't even withdraw money that you earned, your salary."

Even though cash machines don't work, account-holders wait from early morning until lunchtime in the hope that bank workers will top them up, but the doors to the banks often remain firmly shut.

Despite the unremitting fighting taking place across Donetsk and Luhansk, the two regions affected by the armed separatist conflict, large supermarkets are still reasonably stocked.

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Ukraine government cuts cash off to rebel territories in risky bid to defeat separatists

Thousands of people gathered in Kyivs Independence square, known as Maidan, to commemorate the first anniversary of protests that unleashed a year of turmoil in Ukraine. November 21st, 2014. Photo: Genya Savilov/AFP/Getty

A year after Ukraines anti-government protests ousted corrupt president Viktor Yanukovych, the crisis in Ukraine continues with a Russian invasion in the countrys East and a nationwide political system that so far hasnt proven its capable of fighting corruption and bringing about much-needed reforms. Nevertheless, some consider Ukraine an opportunity.

I think that Ukraine remains an attractive investment destination, said Varel Freeman, Executive Advisor at the European Bank of Reconstruction and Development (EBRD) during an interview with Forbes at the Invest in Ukraine conference New York this month. And that may be paradoxical because of the coverage that the conflict gets.

Freeman said the Russian military invasion in Ukraines eastern industrial region, Donbass, thats been taking place since spring, is not dramatically affecting the balance of the country and that Ukraines new administration is substantially reform oriented. There is a blast there, thats not appreciated by many who simply look at the headlines, he adds.

EBRD has been investing in Ukraine for 20 years focusing on long-term financing of equity and debt and has so far bet about $10 billion in the eastern European nation. The main part of the banks portfolio in Ukraine is financial institutions (34%) as well as infrastructure and energy. The bank the largest financial investor in the region is designed to support a transition to market economy in countries like Ukraine and works with private investors and local authorities on public projects. Freeman sees Ukraines investments potential in projects that require intellectual capital, precision manufacturing and anything that requires trained engineering staff. You can find opportunities in putting together teams that are competitive worldwide.

But today Ukraines economic situation is risky. The estimated real GDP for the 3rd quarter of 2014 shrunk by 5.1%, on its way to its 7% contraction this year, according to SigmaBleyzer macroeconomic report.

Ukraines central banks reserves were at $12.6 billion in October, with JP Morgan forecasting a drop to $7.4 billion by years end. According to the International Monetary Fund, Ukraines budget deficit was at 10.1% of GDP the last summer, while Consumer Price Index grew to 17.5% in September.

The International Monetary Fund approved $17 billion bailout program for Ukraine, however the country is unlikely to receive a second tranche an expected $2.7 billion this year.

Anders Aslund, an economic expert in Eastern Europe and a senior fellow at the Peterson Institute for International Economics in the US, foresee a major problems for the country moving forward. In his recent assessment of Ukraines economic situation, he said Ukraine is entering a depreciation-inflation cycle which, if not taken care of by austerity measures and structural reforms immediately imposed by the government, would lead to a financial meltdown.

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Who Invests In Ukraine In A Time Of Turmoil?

Ukraine Today Press Review: One-year Euromaidan anniversary
Peter Byrne has a look at international press to find out what they write about first anniversary of pro-European protests, which led to the ouster of President Victor Yanukovych. Check out...

By: UKRAINE TODAY

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Ukraine Today Press Review: One-year Euromaidan anniversary - Video

Maidan activists.Ukraine Crisis Media Center, 21th of November 2014

By: Ukraine Crisis Media Center

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Maidan activists.Ukraine Crisis Media Center, 21th of November 2014 - Video