Authorities close the eastern border to the opposition
On March 27, the leaders of the United Civil Party Anatol Lebedko and the Belarusian Party of the left-wing party \"Just World\" Sergei Kalyakin, as well as the spokesman for the campaign \"European Belarus\" Alyaksandr Otroshchenkov, were taken off the Minsk-Moscow train in the town of Orsha, on the Belarusian-Russian border.
They had intended to take a flight from Moscow to Brussels, were detained by police in the Belarusian town of Orsha on March 27. All three charged with disorderly conduct and fined by the court.
Blocking the path to the EU via Moscow is the know-how of the Belarusian authorities. Despite the illegality of such actions, they have a short-term didactic and demonstrative effect. These tactics, - selected by the government, - confirmed that they still do not have a long-term strategy for dialogue or isolation.
The detention and trial of three opposition representatives were an apparent attempt by the authorities to demonstrate their ability to restrict the rights of the opposition, preventing their planned meeting with European Commissioner Štefan Füle in Brussels. Earlier, the authorities tested the selective closure of Belarus’ western border for politicians and NGO representatives, introducing the so-called \"travel ban list.\" A peculiarity of this recent operation in Orsha was the illegal withdrawal of all three detainees’ passports, which has further complicated their free movement after the trial.
This (illegal) measure allows the authorities to demonstrate their understanding of a balanced response to visa sanctions, imposed by the EU against Belarusian officials. It is possible that the authorities might think that such measures could hinder the process of negotiation and decision-making between the EU and Belarusian partners in the program \"European Dialogue on Modernization\" (a set of measures to promote cooperation between the EU and Belarusian democratic forces). This program was approved by the EU Council of Foreign Ministers on March 23 and was officially launched at the meeting with Štefan Füle in Brussels on March 29.
However, the selective actions of the authorities (leader of the unregistered Belarusian Christian Democracy party Vitaly Rymashevsky (who was also on the train with Lebedko, Kalyakin and Otroshchenkov, but was not arrested), and the lack of a clear rationale for the introduction of the \"travel ban list\" suggest that Minsk has not yet made a final decision on the freezing of political dialogue with Europe.
For now, the government’s measures are limited to a passive point response to EU actions. An attempt to close the ‘eastern corridor’ to the opposition involves a much greater effort for the authorities due to the lack of border controls with Russia. In this situation, the authorities will either have to increase the number of people involved in the detention operation (for example, traffic police), or confiscate people’s passports on a long-term basis. Both tactics are extremely resource-intensive and illegal, and therefore will not be used widely, but primarily for demonstrative purposes.
The rapid increase in wages has led to a decline in the ratio between labour productivity and real wages to one. Previously, the rule was that enterprises, in which the state owned more than 50% of shares in the founding capital, were not allowed increasing salaries if this ratio was equal to or less than one. The authorities are unlikely to be able to meet the wage growth requirement without long-term consequences for the economy. Hence, the government is likely to contain wage growth for the sake of economic growth.
According to Belstat, In January – August 2017, GDP growth was 1.6%. The economic revival has led to an increase in wages. In August, the average monthly wage was BYN 844.4 or USD 435, i.e. grew by 6.6% since early 2017, adjusted for inflation. This has reduced the ratio between labour productivity and real wages from 1.03 in January 2017 to 1 in the first seven months of 2017. This parameter should not be less than 1, otherwise, the economy starts accumulating imbalances.
The need for faster growth in labour productivity over wage growth was stated in Decree No 744 of July 31st, 2014. The decree enabled wages growth at state organizations and organizations with more than 50% of state-owned shares only if the ratio between growth in labour productivity and wages was higher than 1. Taking into account the state's share in the economy, this rule has had impact on most of the country's key enterprises. In 2013 -2014 wages grew rapidly, which resulted in devaluation in 2014-2015.
Faster wage growth as compared with growth in labour productivity carries a number of risks. Enterprises increase cost of wages, which subsequently leads to a decrease in the competitiveness of products on the domestic and foreign markets. In construction, wholesale, retail trade, and some other industries the growth rate of prime cost in 2017 outpaces the dynamics of revenue growth. This is likely to lead to a decrease in profits and a decrease in investments for further development. Amid wage growth, the population is likely to increase import consumption and reduce currency sales, which would reduce the National Bank's ability to repay foreign and domestic liabilities.
The Belarusian government is facing a dilemma – either to comply with the president’s requirement of a BYN 1000 monthly wage, which could lead to new economic imbalances and could further affect the national currency value, or to suspend the wage growth in order to retain the achieved economic results. That said, the first option bears a greater number of negative consequences for the nomenclature.
Overall, the rapid growth in wages no longer corresponds the pace of economic development. The government is likely to retain the economic growth and retrain further growth in wages. Staff reshuffles are unlikely to follow the failure to meet the wage growth requirement.