Belarusian economy is unlikely to get out of recession thanks to government measures planned for 2016

April 22, 2016 19:40

The government promulgated a series of measures to implement the 2016 forecast, which largely repeat those never-completed in 2015. The government has neither set new tasks, nor has aimed to strengthen the private property institute in Belarus, which means that the economic situation will continue to deteriorate and forecast for 2016 will be failed.

In order to ensure compliance with the parameters of Belarus’ socio-economic development for 2016, the Council of Ministers and the National Bank of Belarus have approved a package of measures, consisting of 93 points required to achieve economic growth forecast at 0.3% in 2016. They have envisaged diversification of exports and a decrease in the EEU share in total export to 37.3%. The government will continue to finance the purchase of domestic equipment with a total worth BYR 1 trillion. The "Asset Management Agency" will be established in order to improve financial health of agricultural enterprises. Unemployment rate is projected at 2% maximum and targeted support for the most disadvantaged social groups should improve.

Most of these measures have been listed in the similar document for 2015. In 2015, the economy was expected to grow at 0.2%-0.7%, labour productivity was projected to grow, so as people’s incomes. Preliminary data for 2015 marked the economic slump by 3.9%, labour productivity decrease by 2.5%, and real wages fall by 5.6%. The forecast has failed due to unfavourable oil prices, leading to lower revenues and negative trends on the Russian market.

The situation on the Russian market is unlikely to improve in 2016, as the revised forecast of the Russian Economic Development Ministry says. Export diversification requires a significant time period, and taking into account the structure of Belarusian exports to non-CIS countries, a significant proportion of which occupy petroleum products, the share of the EEU market will only increase. Support for domestic machine-building enterprises and possible debt relief for agricultural companies will only briefly improve their financial health, while depriving profitable enterprises of financial resources for development.

The government’s plan also lacks most important measures for the innovation development of Belarus - an inviolable right to private property, a stable regulatory framework and a review of approaches to investors. Without resolving these issues, Belarusian socio-economic model is doomed to failure and the existing situation will not be improved.

Overall, most of the measures proposed for the implementation of the forecast for 2016 have been replicated from 2015. Given the lack of appropriate solutions for Belarus’ innovative development in 2016, economic growth is unlikely, while negative trends may enhance and the national currency is likely to continue to weaken.

Photo: "Belarus Partisan"

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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.