“Welcome to Belarus, the centre of Europe!” giggles a young blonde waitress at Boulevard, a sleek café recently opened on the site of a former dingy vodka bolthole on Independence Street, the broad avenue of imposing Stalinist buildings that slices through central Minsk.

So runs that mantra that Belarusians are determined to recite for the visitor at every given opportunity. While possibly geographically accurate if one divines Europe to stretch from the beaches of the Algarve to the wastelands of the Urals, the assertion heard so frequently in Minsk sounds like a geopolitical joke given recent history.

The country of 10 million has remained a largely unknown blind spot on the map of Europe since its independence in 1991; seen as a political hangover from the Soviet Union with Russia as its key ally. Its president since independence, former collective farm boss Alexander Lukashenko, has been referred to in the West as the last dictator in Europe.

The country has survived on the basis of several unglamorous Soviet-era industries – trucks, tractors, fridges and fertilisers – and through the transit fees from transporting Russian oil and gas to Europe as well as receiving subsidised energy for its own use. Eighty per cent of Belarusians work for the state in one way or another – there was no mass-scale privatisation here.

Talk of a merger with Russia was rife in the 1990s but has since gone quiet, but relations with the West have always been fraught. Last year, the US ambassador and most of the embassy were kicked out of the country, and both the EU and the US have imposed travel bans on Lukashenko and members of his ­entourage for human rights violations.

The Belavia flight from London to Minsk – one of just two a week – is three-quarters empty. It carries an eclectic bunch of passengers: a collective farm boss returning from a conference on farm machinery; a Colombian engineering student; and a seedy middle-aged Brit with a stick-thin and possibly teenage Belarusian girlfriend.

Minsk was entirely destroyed during the Second World War and rebuilt in a grand Stalinist style. The streets are eerily clean, with nary a cigarette butt in sight. Government policy keeps advertising to a minimum; the few billboards dotted around are mostly exhortations to lead healthy lifestyles. But after years of isolation, times are changing, and Belarus wants to stake a claim to its place at the centre of Europe. The country has made several steps indicating a desire to open up – British PR guru Lord Bell has been recruited to provide an image boost to the country, several political prisoners have been released, and dozens of Belarusian officials travelled to London last autumn for the country’s first-ever investment forum.

In turn, the EU has suspended its Lukashenko travel ban, and in mid-March included Belarus in its Eastern Partnership programme, qualifying the country for aid and assistance. Russia has also given generous loans, keen to avoid the country slipping out of its orbit. “We were concentrated on rebuilding our own country,” says Sergei Martynov, the Belarusian foreign minister, in explanation for why the state appeared so isolated for so long. “Now we see that probably it’s about time to open up; probably it’s about time to see that our neighbours shed their misinterpretations of our country.”

Martynov is no crusty bureaucrat of the old school. He opens the interview, held in a reception room at the Foreign Ministry building, with a breezy “What’s up?” and his bearing and smooth, lilting English are more Scandinavian than Soviet. Posted for several years in New York, Washington and Brussels before becoming the country’s top diplomat in 2003, he also speaks French and Swahili. “There are very important changes going on in the economy, directed at making it much more liberal and open than it used to be,” he says, referring to plans to privatise state assets and attract foreign investors.

Other officials are less engaging. In the Economics Ministry, seated at a conference table with a plastic flower arrangement at its centre and the moustachioed visage of Lukashenko looking down from the wall, the affable but dull First Deputy Minister Petr Zhabko ploughs through reams of pre-prepared documents, reeling off a never-ending litany of positive statistics and overfulfilled five-year plans like it’s 1959.

But Martynov insists that real change is on the way: “The reality is one thing and the image that’s being projected in the western press is a totally different thing,” he says.

He’s right, to an extent. In many ways the political and social systems still ­resemble the Soviet Union, but in other important ways they don’t. Dozens of cafés have sprung up across Minsk, serving decent food in actually attractive surroundings; students chomp on Caesar salads and use the free wi-fi. Instead of the usual post-Soviet mix of Hummers and Ladas, almost all the cars on the street are mid-range European imports.

While most major enterprises remain in the control of the state and have been hit hard by the crisis, there are some private businesses that have flourished, such as underwear giant Milavitsa. General ­director Dmitry Ditchkovsky, who earned his MBA in Canada, leads a tour of the cavernous factory, which employs 1,800 people and last year sold 18 million pieces of female underwear across Eastern Europe. During the Soviet era, the factory produced three underwear lines – black, skin-colour and white; now it has dozens of styles, including ranges designed in France and Italy.

The most interesting economic project is aimed at stimulating the IT sector. Companies working on software research and outsourcing pay no corporate tax, and the aim is to turn Belarus into “a combination of Bangalore and Singapore”, says Valery Tsepkalo, the director of Minsk’s High Technology Park. Tsepkalo, an ­eloquent former diplomat, has visited Singapore to research the set-up there, and recruited former Malaysian PM Dr Mahathir bin Mohamad as an adviser.

The big IT success story so far is EPAM, an American headquartered company set up by a Belarusian émigré to the US. It has grown from a three-man operation in the early 1990s to a company of 5,000 today, spread across Russia, Ukraine, Hungary and Belarus. The biggest offices are on the outskirts of Minsk, where over 2,000 staff work on orders for clients such as the London Stock Exchange, Microsoft and Thomson Reuters. “It was a purely pragmatic business decision to expand here,” says Karl Robb, the British head of European operations for EPAM. “If you take into consideration quality as well as cost, the country and region is very competitive with India and other Asian countries.”

Some clients had initially been apprehensive about outsourcing work to the country given its political reputation, he says, but they were surprised by what they found on arrival.

There’s little doubt, however, that for all the change in rhetoric, the country still has a nasty side. Alexander Lebedko, a prominent opposition leader, pulls open the back page of his blue Belarusian passport, which bears a “No right to leave the country” stamp. “They gave me this after I met President Bush in Washington last year,” says Lebedko, from a small and chaotic office inside one of a series of tall Minsk blocks known as the “Sweetcorns” for their round, corrugated form. At various times in the past 15 years, says Lebedko, he has been intimidated, beaten up, and threatened with execution by KGB agents – the KGB in Belarus still goes by its old name. Belarus still retains the death penalty, with sentences carried out by a bullet to the back of the head. “The changes are all cosmetic,” says the quietly spoken Alexander Kozulin, another opposition leader who was jailed for over two years, and whose release last autumn was one of the conditions the EU set for closer ties.

For the EU, desire for engagement is at least partly driven by events in Kiev. With chaos unravelling in Ukraine and Georgia over the past year, many in Brussels feel that a stable dictatorship is preferable to a basket-case democracy.

“There are no real legal changes, no new personnel and no new ideas,” agrees Yaroslav Romanchuk, an opposition economist and head of the Mises Institute, a think-tank in Minsk. “All we have seen are cosmetic changes engineered to get a second donor in addition to Russia.” Romanchuk says Lukashenko’s drift towards Europe is aimed at drumming up more cash. He claims to have seen a secret memo from government officials to Lukashenko stating that the country has been hit so hard by the financial crisis that it faces default by August.

The regime dismisses the opposition as insignificant and unpopular. “We have a term in this country: ‘sofa parties’, which means that the whole party can fit on one sofa,” says Martynov. He sees the ­rapprochement with Europe as a natural progression. “You cannot isolate a country which is at the heart of Europe,” he says. “And Belarus is the geographical centre of Europe, after all.”

Visit monocle.com for our Belarus slideshow.

01 Hired British PR firm Bell Pottinger to improve its international image.
02 Drawn up an initial list of companies up for privatisation.
03 Introduced zero per cent tax on all tech companies.
04 Held an economic forum in London last November to attract investment.
05 Freed all internationally recognised political prisoners.

01 Swallow their pride and liberalise the visa regime. If it becomes easier to travel there, more western companies might be convinced of the benefits of doing business.

02 Revamp the national airline. Belavia’s fleet is not too bad by regional standards, but the website is shocking. Instead of the link to Lukashenko’s website, there should be an online booking facility.

03 Offer privatisation deals to investors at knock-down prices on condition of much-needed real investment.

04 Begin real dialogue with the opposition.

05 Hold free elections without Lukashenko’s participation. There are plenty of talented people in the administration but it’s difficult to take the country seriously while Lukashenko is in charge.

The Belarusian leader Lukashenko has ruled out his two adult sons as “too weak” to succeed him, but two years ago, Belarusian TV viewers were introduced to Kolya, the dictator’s five-year-old third son. Lukashenko Jr is a regular participant in top-level talks, reportedly sitting on his father’s lap during a meeting with the Armenian president this March. “I will prepare the little one,” Lukashenko has said. Constitutionally, the president must be 35 or over, so if he gets his way, Lukashenko could be in power until 2039, when he’ll be 85.