Amid falling retail turnover, trade wars among Belarusian regions may escalate

February 06, 2017 12:58

In 2016, retail sales decreased by 17% compared with 2015. The main reason for the fall in retail sales was a decline in wages and rising utility bills’ share in household spending. Amid further layoffs in the public administration bodies, regional officials will be interested in reporting maximum improvements in statistical indicators, which may lead to trade conflicts among Belarusian regions.

According to the National Statistics Committee, retail turnover in 2016 totalled BYN 36.2 billion and fell by 4.1% compared with 2015. In dollar terms, retail turnover totalled USD 18.2 billion and decreased by 17% due to the devaluation in H2 2015 and early 2016. In 2016, every Belarusian bought retail goods worth 5.3 average monthly salaries. This is the lowest consumer spending level in the last five years due to the increase in the share of utility services in a household budget.

The fall in retail turnover is linked to falling incomes. In Belarus, there is a direct correlation between a wage size and the retail trade turnover. Despite devaluation, as a rule, every Belarusian spent at least 5 monthly wages on retail consumer goods. New trade forms (e-commerce, retail service for buyers from the regions, mobile shops, etc), expansion of commercial networks in the regions and reduced trade on the markets have led to changes in the share of different types of trade in the overall trade turnover, but had no impact on the total consumer sales. Wage arrears or wage-cuts at the largest enterprises in the regions have led to a fall in retail sales.

In 2016, a new trend in retail turnover related to internet sales by retailers. According to the accounting methodology, retail sales accounted for the place of location of the commercial facility. Most online shops are located in Minsk and the Minsk region, but deliver across the country. As a result, regional purchases are reflected in the statistics of Minsk and the Minsk region, which may dissatisfy regional officials.

In the near future Belarusian public sector is likely to undergo further layoffs. When considering candidates for a layoff, their performance and performance of organisations and economic sectors under their supervision will be taken into account. Hence, regions may start trade wars in order to achieve most positive results, officials may protect local producers in local retail chains and put pressure on large retailers in order to preserve maximum turnover in their region. With regard to online shopping, large Internet shops may be required to hold separate accounts by region in order to incorporate their sales reports into the overall trade statistics by region.

Due to a drop in wages in Belarus, the retail trade turnover fell by a comparable amount. Amid layoffs in the public administration bodies, regional officials are likely to do their best to meet the projected performance indicators, which could lead to regional trade wars and attempts to change accounting methodology for large online retailers.

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The Belarusian authorities have launched a discussion on the moratorium or abolition of the death penalty under the pressure of Belarusian human rights activists and international community. Apparently, the authorities are interested in monitoring public sentiments and response to the possible abolition of the capital punishment. The introduction of a moratorium on the death penalty would depend on the dynamics in Belarusian-European relations, efforts of the civil society organisations and Western capitals.

In Grodno last week, the possibility of abolishing the death penalty in Belarus or introducing a moratorium was discussed.

The Belarusian authorities are likely to continue to support the death penalty in Belarus. During his rule, President Lukashenka pardoned only one person, and courts sentenced to death more than 400 people since the early 1990s. Over the past year, Belarusian courts sentenced to death several persons and one person was executed.

There are no recent independent polls about people’s attitude about the death penalty in Belarus. Apparently, this issue is not a priority for the population. In many ways, public opinion about the abolition of the death penalty would depend on the tone of the state-owned media reports.

That said, the Belarusian Orthodox Church and the Roman-Catholic Church stand for the abolition of the capital punishment, however their efforts in this regard only limit to public statements about their stance. Simultaneously, the authorities could have influenced public opinion about the death penalty through a focused media campaign in the state media. As they did, for example, with the nuclear power plant construction in Astravets. Initially unpopular project of the NPP construction was broadly promoted in the state media, and eventually, according to independent pollsters, was accepted by most population.