State employees’ salaries increased: a promise that had to be fulfilled
Canceled in August, the raise of the tariff rate for the first class workers would be implemented in September. Accelerated inflation in August made indexing of wages inevitable. Increased incomes will increase domestic demand and may result in greater inflation.
On August 20th, 2012 the Council of Ministers of the Republic of Belarus adopted a resolution No 769, setting the tariff rate for the first class workers at BYR 225,000.
On September 1st, 2012 a new tariff rate for the first-class workers will be BYR 225 thousand (increased by 7.1%), which will raise the salaries in the public sector by 6.1% on average. The regulation also increases differentiation among employees in terms of payment, depending on the complexity of work.
There are funds in the state budget to increase salaries in the public sector. Consolidated budget surplus in the first half of 2012 will beBYR 3.7 trillion. Belarusian companies earned BYR 41.9 trillion net profit. Additional budget revenues will thus be redistributed in citizens’ favour.
Increase in the tariff rate is lined to the inflation. In August, due to the increased utilities’ costs inflation accelerated. During the first two weeks in August, consumer prices rose by 1.5% compared with average prices in July. Indexation of wages is carried out if inflation reaches 5% and higher during a period. Thus, state employees’ salaries increase is a forced and inevitable measure.
The average salary in the public sector with the increase from September 1, 2012 will be BYR 3.2 million. Officials’ wages lag behind the average in the economy, and such disparity has a negative impact on employment in the public sector. The outflow of workers into other spheres can lead to a staff shortage for a number of vacancies.
However, there are some negative trends in the economy. Industrial growth slowed down. Labour productivity could not keep up with the growth of wages in the economy. Unfavorable trends in foreign markets for a number of Belarusian products can reduce profits.
In these circumstances, additional incomes of state employees may increase domestic demand, increase imports and result in a general price growth, including services cost, which will level incomes’ growth.
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.