Measures to support industry will not save Belarusian economy from further fall

April 22, 2016 19:36

In January – October 2015, GDP fell by 3.9%. The authorities’ measures undertaken in October in order to preserve employment have somewhat offset the decline in production at major Belarusian industries. The Belarusian government has exhausted all domestic remedies to reverse the negative trends in the economy. The government is unlikely to switch on the money printing due to the ongoing talks with the IMF over a new loan. 

According to the National Statistics Committee, in January – October 2015, Belarus’ GDP fell by 3.9% compared with the same period in 2014. In January – September GDP fell by 3.7%. Indices have fallen in all economic activities except retail trade. Investments in fixed assets decreased by 14.1%, the drought has led to a decrease in the agricultural production by 3.9%, freight transportation has decreased by 3%, industrial production has decreased by 7.1% and stocks in October have increased by BYR 673 billion.

In October, in order to reduce social tension in the view of the Presidential campaign, the authorities undertook measures to encourage artificial employment at various industrial enterprises. As a result, rubber industry has increased production, and mechanic and electrical engineering have improved performance. This has somewhat allowed to offset reduced production in food and chemical industries, and refining.

The authorities’ measures were only temporary. Budgetary constraints would not allow carrying on with such measures and enterprises would have to carry out mass layoffs in order to improve their financial health and performance. This would further reduce people’s incomes and retail trade turnover.

In Q4 2015, the production of potash decreased due to repair works, consequently leading to reduced indices in wholesale and transport. The main volume of agricultural works has been completed, meaning that agricultural indices will not change significantly. The Russian economy has shrunk by 3.7% since early 2015 without any positive outlook, which means that Belarus would be unable to increase her exports on the Russian market. Amid talks with the IMF, the Belarusian authorities would refrain from further measures to stimulate the economy through money printing and the industry would continue its fall. For the first time in the past 15 years, GDP may shrink by 4.1-4.3% by the year-end.

The government’s measures have only slightly slowed down recession in Belarus. Since it is impossible to achieve GDP growth in 2015 anyway, the government will not switch on the money printing press to stimulate the economy.

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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.