Annual review 2013 | Forecast for 2014

Category status:
April 22, 2016 18:42

Summary

In 2013, the Belarusian authorities remained in full control of the country, despite the state apparatus becoming steadily less efficient and providing fewer social benefits to the population . The lack of real economic progress was compensated by emission-pumped economic growth and pay rises.

Key trends in politics:

  • state apparatus became less manageable;  
  • shortages in human resource shortages at top and medium management levels in the government;
  • social benefits cut and quest started to replenish the state budget at people’s cost;
  • dependence on Russia increased;
  • attempts made to resume high-level dialogue with Brussels and Washington.

Key trends in economy:

  • economic recession coupled with poorly diversified export markets;
  • potash cartel break-up and reduced investment demand on the Russian market;
  • foreign trade deficit and overstocked warehouses;
  • international reserves fell
  • expectations of devaluation increased

Forecast for 2014:

  • public administration will become increasingly inefficient, threatening to split the ruling groups;
  • the ‘social welfare state’ will continue  to shrink;
  • social tension will grow;
  • law enforcement’s powers will be strengthened in order to prevent a split among the elite and to counteract open discontent among the population;
  • greater involvement in the Eurasian integration project in order to secure external loans and prevent social tension growth;
  • economic dependence on Russian capital will continue to grow;
  • industrial production slowdown;
  • picking citizen’s pockets through ‘new’ tax and non-tax mechanisms;
  • restricted pay rises.

In 2014, economic ‘development’ will be out of the equation. Should Belarus manage to receive loans and sell property to gain circa $3-4 billion, this sum will be spent on preserving the status quo. If the authorities fail to raise enough funds, the likelihood of devaluation will increase.

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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.

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