Gap between high and low-wage Belarusian regions will increase

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April 22, 2016 19:37

According to the National Statistics Committee, in October 2015, while nominal wages reduced by BYR 25,400 on average throughout the country, in 10 lowest paid regions – by BYR 155,700. In regions with higher wages, wages fall slower due to the presence of highly profitable companies with a sustainable market niche. The overall decline in wages in Belarus will continue. The Vitebsk and Mogilev regions may face a rapid decline in retail turnover, a rise in unemployment, and a higher number of bankruptcies among state-owned enterprises. Amid fewer employment opportunities on foreign markets, domestic labour competition will increase, leading to costs reduction by enterprises thanks to wage cuts and, hence, better competitiveness of some domestic products on foreign markets.

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According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.