Government meets the requirements of the ACF of the EurAsEC
The Belarusian authorities have fulfilled an obligation under the loan agreement with the Anti-Crisis Fund of the Eurasian Economic Community (ACF EurAsEC),
namely, reduced budget deficit via increased tax rates on oil extraction and potassium salt mining: up to Br 3130 and Br 12240 per ton respectively.
Minister of Economy Snopkov announced changes in the mechanism of providing state support to the real sector. The new mechanism envisages programmatic rather than individual approach based on principles of competition. Also Minister Snopkov promised to reduce the overall amount of state support.
Conservative policy of the authorities in fulfilling their obligations vis-?-vis the Anti-Crisis Fund of the EurAsEC, i.e. without causing significant damage to the standard of living of the population, envisages securing the autumn tranche of USD 400 million however, it will not result in substantial changes in the economic policy.
First of all, the Belarusian authorities are trying to fulfill those commitments of economic reforms that will not have an immediate impact on the living standards of the population (increments of utility services and public transport tariffs are still delayed). Given the critical level of the country’s gold reserves, Belarus cannot afford not to receive the second tranche of USD 400 million in November, or to provoke a new wave of distrust of the promises of the government.
However such cautious policy will affect the incomes of the population indirectly. Implemented policies will result in gradual contraction of the cumulative demand, as well as in adjustments of the basic principles of functioning of the Belarusian economy. Today state support plays crucial role in the real sector.
Approaching the autumn, in order to secure the third tranche, the authorities will continue fulfilling their commitments, i.e. to intensify privatization, to cut down state support programmes, to raise the refinancing rate and tariffs for the population, etc.
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.