Economic recession in Belarus will be treated with changes in statistical methodology
The National Statistical Committee has adopted a new methodology to measure non-observed economy. These changes were prompted by the need to have better understanding how non-observed economy affected the overall economic performance in Belarus. As a result, GDP is unlikely to start growing, however some statistical indices may improve.
The new regulation regarding non-observed economy measurements will take effect in late June 2015. The core changes in the methodology imply inclusion of a greater number of activities when calculating GDP. In particular, the volume of housing services for personal consumption has been increased. If a company does not provide statistical reports, then it will be assumed that its workers produce equal volume of products with those companies, which engage in similar activity and report to the Statistics Committee. Private entrepreneurs will report like small enterprises with up to five people. Tutoring services will be measured based on number of those admitted to full-time studies at universities.
Such changes have been introduced in order to have better understanding how non-observed economy affects the overall economic performance in the country. Errors and omissions in the Belarusian balance of payments previously often were explained by the exclusion of non-observed economy from statistical measurements. Several state agencies will be in charge of implementing the new regulation.
In Q1 2015, the Belarusian economy fell by 2.6% without any prospects for improvement. Industry was the main culprit of falling GDP. Meanwhile, amid crisis and mass layoffs, non-observed economy has grown. Non-observed economy’s production output would be difficult to compare with the production output at larger enterprises and in most cases would be significantly lower. Expert evaluation, which will be used in the updated methodology would be difficult to verify, which might lead to overreporting. Some entrepreneurs will cease operations, but will be included in GDP measurements.
Overall, the Belarusian Statistical Committee has acknowledged problems with traditional economy reporting. It seeks to improve reporting by including non-observed economy indicators. Eventually, these new adjustments in the methodology are unlikely to show significant impact of non-observed economy on the economy in general, however, they might demonstrate economic growth by about 1% before the presidential elections in October 2015.
President Lukashenka continues to rotate staff and rejuvenate heads of departments and universities following new appointments in regional administrations. Apparently, new Information Minister Karliukevich could somewhat relax the state policy towards the independent media and introduce technological solutions for retaining control over Belarus’ information space. New rectors could strengthen the trend for soft Belarusization in the regions and tighten the disciplinary and ideological control over the student movement in the capital.
President Lukashenka has appointed new ministers of culture and information, the new rector of the Belarusian State University and heads of three universities, assistants in the Minsk and Vitebsk regions.
The new Information Minister Karliukevich is likely to avoid controversial initiatives similar to those former Minister Ananich was famous for, however, certainly within his capacities. Nevertheless, the appointment of Belarusian-speaking writer Karliukevich could be regarded as the state’s cautious attempt to relax environment in the media field and ensure the sovereignty of national media.
The Belarusian leadership has consolidated the trend for mild Belarusization by appointing a young historian and a ‘reasonable nationalist’, Duk as the rector at the Kuleshov State University in Mogilev. Meanwhile, while choosing the head of the Belarusian State University, the president apparently had in mind the strengthening of the ideological loyalty among the teaching staff and students at the main university in order to keep the youth movement at bay. Previously, Korol was the rector of the Kupala State University in Grodno, where he held purges among the disloyal teaching staff.
The trend for the renewal of mid-ranking executives and their rejuvenation has confirmed. The age of the Culture Minister and three new rectors varies from 39 to 44 years old.