Anti-Russian sanctions backlash on Belarus
The fact that Russian and, consequently, Belarusian roubles have depreciated following the information about the approval of anti-Russian sanctions by the US president, has reaffirmed the strong dependence of the Belarusian financial system and economy as a whole on the Russian economy. Belarus continued attempts to counter-balance strong Russian influence by stepping up cooperation with China. In addition, she has prepared to argue about the entire spectre of cooperation issues within bilateral relations with Russia and within the EEU framework.
The Belarusian authorities have not interfered to neutralize the impact from the Russian rouble depreciation on the Belarusian rouble. The financial market is in short supply, and the national debt has already reached a dangerous 40% of GDP without tangible prospects for changing this ratio for the better. The authorities attempt to balance out Russia’s influence on the Belarusian economy by not only developing a dialogue with the West, but also developing relations with China, offering special conditions to Chinese corporations. In addition, Belarus is attempting to balance Russia's influence by searching for common ground with Kazakhstan within the EEU framework (although, until now, such attempts have been inconsistent and ineffective).
Last week, bilateral relations with Russia remained within the usual framework of mutual ad hoc bans on imports of some produces and symbolic gestures of loyalty. The Rosselkhoznadzor decided to restrict imports of Belarusian ice cream, and Belarus – imports of pork from the Moscow region. The states continued to work on a compromise regarding the Russian border control of flights from Belarus. The Belarusian Foreign Ministry announced an open accreditation for journalists to monitor the West-2017 military drill.
The country's leadership has instructed the local authorities to raise minimum wages at enterprises by the end of 2019 to BYN 1,000, which would lead to an increase in the average wage in the economy as a whole to BYN 1 500. The pace of wage growth in 2017 is insufficient to ensure payroll at BYN 1000 by late 2017 without manipulating statistical indicators. In order to fulfil the president’s order, the government would have to increase budgetary expenditures on wages in healthcare and education, enterprises – to carry out further layoffs and expand the practice of taking loans to pay wages and restrict investment in modernisation of fixed assets. In 2010, the artificial increase in wages led to a threefold devaluation in 2011, an increase in the average salary to BYN 1500 will not match the capabilities of the economy and would lead to yet another devaluation.