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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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