Belarusian authorities start preparing for 2015 presidential campaign

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April 22, 2016 19:00

The Belarusian leadership has started to prepare for the presidential election in 2015 by probing issues that could be popular among society and could take central stage in Lukashenko’s campaign.

In the upcoming presidential campaign, one of the authorities’ main objectives is to release tension and overcome the values divide in Belarusian society so as to prevent political destabilisation.

However, the authorities are not considering changing the traditional scenario for the election campaign, which excludes the opposition from fully participating in the election process.

In an interview with Euroradio, Central Election Commission Head Lidia Yermoshina spoke about their fears during the elections, the opposition, the idea to nominate Statkevich as a presidential candidate and why the CEC should not be held responsible for the international recognition of the elections.

After the president’s press conference with the Russian regional media, some political analysts said Lukashenko had started the election campaign. Meanwhile, it is likely that the presidential elections will be held in autumn 2015. Most likely, with his speech Lukashenko meant to air the main themes for the 2015 campaign.

Since the president was unable to refer to progress in socio-economic development due to its absence, he attempted to talk about issues which had previously had a positive effect on his ratings. For example, in H1 2014, President Lukashenko beefed up his anti-corruption rhetoric, and tried to act as the main guarantor in preserving favourable relations with Russia and obtaining bonuses from the Eurasian integration.

At the same time, the Belarusian authorities are keen to avoid a repeat of 2010 presidential campaign and having numerous opposition candidates in the 2015 elections. CEC Head Yarmoshina outlined the likely scenario for the upcoming presidential elections: "I think that at least four people should be on the ballots - three is not enough. What if one candidate suddenly withdraws? There were three candidates in the 2001 elections, albeit initially something like 26 wanted to run. Although, only four were able to collect the signatures".

Even before Yarmoshina’s interview, Vice-Chairman of the Liberal Democratic Party Sergei Gaidukevich mentioned a similar scenario for the 2015 presidential election “Sergei Gaidukevich and Lukashenko will be the candidates, and as soon as the elections are announced, the opposition will accelerate, hold their Congress in the same week (we’ll help to accelerate them) and nominate a candidate from the opposition. Maybe they will fail to agree among themselves – then we’ll have two candidates from the opposition. We do not believe there will be anybody else.” 

Unlike during the previous thaw in Belarus-EU relations in 2008-2010, in 2014 the Belarusian authorities managed to impose their agenda in talks with the West and unblock the relations with the EU and the US without fulfilling the basic requirement – the release of political prisoners.

The Belarusian authorities are hoping that relations with Brussels will continue to normalise unconditionally and that the West will cut its support for the Belarusian opposition. Amid the crisis in Ukraine, official Minsk hopes that the West will revise its policy towards the Belarusian leadership. In addition, the pragmatic cooperation between Minsk and Brussels (without political conditions) includes a waiver of political liberalisation, which, according to the Belarusian leadership, could cause political destabilisation in the country and result in attempts to force regime change through mass protests on the election day.

The Belarusian authorities associate the main risks during the 2015 presidential campaign with a potential conflict with the Kremlin, inter alia, over the Eurasian Economic Union. This may be one of the main reasons why the president does not want to hold elections in the spring of 2015. In early 2015 he might have to argue with the Kremlin over the practical applications of the EEU Treaty, which takes effect on January 1st, 2015.

The conditions for the opposition in the 2015 election campaign will be harsher than in 2010. However, the authorities will attempt to narrow the divide in values among Belarusian society by integrating some ideas of the opposition into the state policy.

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Growth in real wages may disrupt macroeconomic balance in Belarus
October 02, 2017 12:12
Фото: Дмитрий Брушко, TUT.BY

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.

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