The authorities try to solve a dilemma: how to raise salaries and to keep citizens’ money in the economy?
At a meeting on May 3 with the Chairman of the Federation of Trade Unions, L. Kozik, President Lukashenko announced that the average salary in Belarus by the end of 2012 should amount to 500 USD, and that this should happen in tandem with a rise in labor productivity.
Lukashenko’s statement concerning the average salary increase of up to 500 USD in equivalent suggests that, firstly, the authorities are afraid of protest moods among workers who are unsatisfied with low salaries. That is why several governors have stated earlier that salary increase according to the stated level is inevitable and the KGB has reported that measures on social tension relief were successfully implemented in several enterprises in 2011.
Secondly, the fact that the President has joined a “salary rush” demonstrates Lukashenko’s desire to fulfill his famous election pledge of 2012 (the average salary shall be equivalent to 500 USD) and that finances therefore are likely to be raised. A reservation concerning the corresponding rise in labor productivity made by the President shall be treated as an essential backstop: the President will use this to justify a broken promise and to postpone its fulfillment.
The majority of Belarusian experts think that as far as it is extremely difficult to raise labour productivity (according to official figures, in March the average salary in Belarus approximately amounted to 390 USD), the Belarusian authorities will resort to money printing in order to implement its plan.
In this case the main task will be to prevent the most common citizens’ behaviour scenario: translation of Belarusian roubles into foreign currency as it happened in 2010.
For this purpose, the Government and the National Bank launched two large information campaigns in April and May. Firstly, Deputy Prime Minister Rumas personally advertised a so-called \"people’s IPO\": the first public offering of the Minsk Plant of Sparkling Wines on May 2 in which citizens were actively offered to participate. Secondly, in April the National Bank launched a campaign to promote financial literacy during which it is planned to tell Belarusians about various ways of investment.
Nevertheless, it is expected that in the case of the promised salary increase by the year’s end (1.3 times), the authorities will simply not manage to educate its citizens about types of investment which are safer and more favorable to the economy. Most likely the population will habitually continue to transfer extra money into foreign currency. This steady trend in the behavior of Belarusian investors has been observed for at least the last four years. In summer 2011, the Administration of the President of Belarus estimated the foreign currency cash holdings of Belarusians to be 7 billion USD.
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.