Belarusian economy is unlikely to create enough jobs for all laid off workers in 2017
In 2016, 91000 people were laid off in Belarus, which is 1.5 times more than in 2015. The crisis in the economy led to layoffs in trade, construction and industry. The Belarusian economy is unable to create more jobs in the near future and those laid off are likely to join the grey market or look for jobs abroad.
According to the National Statistics Committee, in January - September 2016, 468 400 people were hired and 559 400 - laid off, meaning, that 91 000 people have lost jobs, which is 1.5 times more compared with 2015. Most layoffs were reported in industry, construction, wholesale and retail trade. Amid wage cuts, only two Belarusian regions reported more hires as compared with layoffs.
Partially, layoffs were due to natural demographic processes - those approaching the retirement age by 35 000 people pierced potential new employees in early 2016. However, the bulk of cuts in the economy were due to the growing economic crisis in Belarus. Retailers have faced with falling turnover and had to adjust their regional policy, abandoning loss-making facilities and activities. The construction sector was unable to find workload for workers amid a decline in the housing construction and a decline in investment in industrial fixed assets. Industry is attempting to optimise costs amid increasing competition, both on foreign and domestic markets, by laying off workers and redistributing responsibilities among the remaining employees.
In 2016, the budget sector stopped generating new jobs due to budget cuts. The IT sector is actively hiring, however, it is unable to provide jobs to all laid off workers due to the need to retrain them. The state-owned enterprises will be subject to audit to determine their real financial health, which may lead to a new wave of layoffs.
In the given circumstances, only foreign investment in various economic sectors could generate new jobs for the excess workforce. However, the investment climate in Belarus is unfavourable for foreign investors, there are no guarantees for the inviolability of private property and the government may suspend operations of any successful business at any time. The state will not make efforts to change and improve the business climate, therefore the excess workforce is likely to look for jobs abroad or join the grey economic sector.
Overall, mass layoffs in Belarus are the result of the ongoing recession. While looking for jobs, Belarusians are likely to consider the option of changing the country of residence or work out of sight of the authorities.
Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.
The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.
Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.
For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.
Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.
The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.