FORECAST FOR 2012
The economic agreements signed by President Lukashenko in Moscow and the first major sale of the assets of the Belarusian Beltransgaz will strengthen the political authority of President Lukashenko and his administration for a while.
It is also likely, that the proceeds received just in time, will allow the authorities to restore the lost popularity among the population, and in particular, the electoral rating of the President. At the same time, the security forces and the Government will continue fighting for the preservation of the conquered positions, which will only decrease the level control over the whole public administration system of Belarus.
The stabilization period in question, will last no longer than six months to a year. After that period, the acute issue of how to keep up citizen’s standard of living and the popularity of the authorities will return back on the agenda, most likely leading to a new management crisis.
In 2012 the main trends of the previous years will continue: the external debt will grow, there will be a shortage of the gold reserves, there will be some non-transparent privatization deals, competitive ability will deteriorate, incomes will fall, unemployment will rise and hidden labour migration to Russia will increase, there will be investment crisis and the gradual decay of production facilities.
The government has once again demonstrated that it would implement economic reforms under strong external pressure by creditors only. 2012 will inevitably result in recession and deindustrialization, increasing misbalances in the key sectors of economy and flows of financial resources, as well as general voluntarism and unpredictability in the economic policy.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.