Belarusian leadership strengthens role of parliament in rectifying unpopular government initiatives

Category status:
July 04, 2017 10:54
Фото: Ольга Шукайло, TUT.BY

The Belarusian leadership has allowed a critical discussion between the parliament and the government on unpopular initiatives. MPs with a critical view and established feedback from the population help to limit and rectify the government's most resonant actions to reduce social guarantees for the population. In all likelihood, the role of the parliament and the public activities of MPs would increase as the president takes a back seat in resolving current issues and identifying strategic priorities for the state.

Belarusian MPs have stood up for drivers and criticized the Government during the presentation of its activity report.

Amid reduced involvement of the president in the activity of the state apparatus, some prominent representatives of the power system have taken the initiative to resolve the most pressing issues in society. Apparently, some representatives of elected bodies, especially the parliament, are feeling an increased pressure from the population and pass people’s concerns to the government in order to cure the most unpopular initiatives, and to boost their popular ratings among the electorate.

Some parliamentarians and local deputies have continued to communicate with their voters after the elections. Most likely, they regard popular support as an additional asset in their career amid languishing state resources, staff cuts and enhanced competition in the public sector. In addition, some of them might have weaker positions and connections in the nomenclatural environment, which they try to offset with their popular ratings and influence on public opinion.

That said, it could not be ruled out that some of them (second and third level managers) count on the attention and support from the president, so as they do not pose a threat to his domination on the national level. In turn, President Lukashenka does not oppose to balancing out the influence of supporters of austerity measures from the government with MPs, who have a consistent feedback from the local population. For example, MP Politiko from Baranovichi (he has been elected twice already), has repeatedly (sometimes quite harshly) criticised the government on various issues; he has also proposed to revise the redistribution of the toll payments in favour of the local budgets.

Overall, the role of the parliament and some MPs in the power system has started to transform to offset the reduced public activity of the president and his non-involvement in resolving ongoing managerial issues and rectifying unpopular government initiatives.

Similar articles

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.

Recent trends