More wage cuts in Belarus
As of late August, the average wage in Belarus totalled less than USD 430. Wage cuts were due to negative trends in the Belarusian economy and on the Russian market. After elections, Belarusian enterprises may resume their lay-off policies and the gap between wages in Russia and Belarus may widen up to 25-30%.
According to the National Statistics Committee, the average monthly wage in Belarus in August was BYR 6,971 million, which is BYR 38,000 less compared with July 2015. This is the first reported wage cut in 2015. In US Dollar terms, wages in Belarus have fallen below USD 430 per month. The difference between the highest paid and the lowest paid jobs has increased. For instance, software developers are paid seven times better than house appliances repairers. In early 2015, this difference was 6.1 times.
Wage cuts only reflect the situation in the economy. GDP has fallen by 3.5%, industrial production has declined, the state budget is lacking funds to subsidise housing construction programmes, which is leading to a decrease in construction and installation works. Sanctions against Russia have reduced the investment potential of Russian companies, and falling oil prices have led to the sequestration of the Russian budget and reduction of subsidies to Russian farmers to purchase agricultural machinery, including that made in Belarus. The fall in global food prices has had a negative effect on the cost of meat and dairy supplies to Russia, prompting Belarusian producers to cut costs.
In the past, Belarusian workers responded to wage cuts with labour migration to Russia. However, in 2015, the average monthly wage in Russia fell below USD 500 and labour migration to Russia has lost its economic sense. In some areas, wages in Belarus are higher than in Russia. Amid considerable dependence of the Belarusian export on the Russian market, further convergence of wages in Belarus and Russia will reduce the competitiveness of Belarusian products. As a result, after the elections, Belarusian companies may be prompted to resume lay-offs and readjust wages if rouble is not devalued. The estimated average wage in Belarus would then be 75-70% of the average wage in Russia, i.e. USD 370- USD 380 per month.
Belarus’ high dependence on the Russian market has had a direct impact on the Belarusian labour market. The difference between wages in Russia and Belarus has reduced to 15%, leading to a deteriorated competitiveness of Belarusian products and further wage cuts in Belarus if rouble is not devalued.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.