Additional tax on working population would reduce Social Security Fund deficit but unlikely to support unemployed

March 20, 2017 10:31

The Labour Ministry proposed to create an insurance fund within the Social Security Fund for Population at 0.5% of the payroll, which would ensure that people, who had lost their job, received at least 60% of the most recent wage for up to six months. Taking into account current wage level and employment in the economy, the additional tax burden on enterprises would total circa BYN 125-130 million. In 2016, more than 100 000 people were laid off on a net basis, which means the planned amount would not cover the need in benefits. It would be reasonable to expect that the authorities continue to increase the tax burden on profitable enterprises. Unemployment benefits are likely to increase too, albeit without being tied to the most recent wage. Meanwhile, by reducing the Social Security Fund deficit, the authorities would reduce budgetary assistance to the Fund. Creating an insurance fund would not solve the unemployment issue, as only a sufficient number of jobs in the economy would make it possible to avoid the increased tax burden on enterprises.

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Belarusian authorities manoeuvre between repression and liberalization to retain dialogue with Western capitals
May 22, 2017 13:36
Фота: Еўрарадыё

Yet Minsk has not decided on the "patriots' case" and is attempting to break new grounds in relations with the West. Meanwhile, Brussels is ready to lower cooperation levels with the Belarusian authorities in anticipation of new political prisoners to appear after the trial against former White Legion activists, irrelevant of the charges, either preparation for riots, or creation of illegal armed groups, or any other. Minsk is unlikely to cross the red line in bilateral relations with the West and new political prisoners are unlikely to appear in Belarus.

The harsh clampdown on protests and arrests this spring in Belarus are unlikely to lead to new moves by the European Union, however, the EU would closely monitor ‘some investigations’, including the ‘patriot’s case’ aka the ‘White Legion’ case.

According to human rights defenders, 17 people remain in custody, of which 16 are former members of the White Legion and one supporter of Statkevich-led the Belarusian National Committee, Sergei Kuntsevich. The law enforcement has been releasing former activists of the White Legion and members of the Patriot Club, most likely in order to mitigate criticism from Western capitals. Amid Minsk Dialogue expert conference with the participation of Belarusian and EU officials, the authorities released from custody head of the Bobruisk "Patriot" Club Nikolai Mikhalkov. In addition, the Belarusian leadership expects to ease some tension by demonstrating greater openness to a dialogue with civil society on human rights issues. For instance, for the first time the Belarusian authorities and human rights defenders held consultations on Belarus’ fifth periodic report to the UN Human Rights Committee.

The Belarusian leadership has attempted to mitigate the West’s attitude towards the criminal prosecution against former activists of the "White Legion" by adding charges of creating an ‘illegal armed formation’ to ‘preparing for mass riots’ charges.

Apparently, Minsk also gains from speculations about possible disagreements among the executives - supporters of stronger ties with Russia, and "pro-Western" reformists lead by Foreign Minister Makei. That said, the Presidential Administration and President Lukashenka have full control over the foreign policy agenda and the law enforcement.

Overall, Minsk is determined to develop relations with Western capitals. The Belarusian authorities are likely to take controversial actions, i.e. to demonstrate the desire for liberalization in some areas and occasionally tighten repressions against the opponents, however without creating new political prisoners.