Belarusian parties prepare for Parliamentary elections

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April 22, 2016 17:47

On 5 June, the 13th Congress of the Belarusian Social Democratic Party (Gramada) voted for the new leader, replacing A. Lyaukovich with the Head of the Grodno regional organization of the Belarusian Social Democratic Party (Gramada) Irina Veshtard. Voting results as follows: For - 77 Against - 1 Abstained - 7.

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Belarus has made a second major step towards the “constructive opposition” of the parties that were not directly involved in the presidential campaign of 2010 and therefore suffered much less political losses. The probability is high that the BSDP (G) will express desire to participate in the Parliamentary elections and will not boycott them.

The BSDP (G) made a second attempt to change party leadership after failure to do so a year ago. Last year the Congress also voted for the new Chairman, Mr. Sidarevich to replace Mr. Lyaukovich however the Justice Ministry of Belarus found the decision of the Congress illegitimate. While confirmation from the Justice Ministry of the Congress results is pending, the new leadership of the BSDP (G) is refraining from any strategic statements about the party’s future plans.

However, there are grounds to assume that the party plans will be similar to the plans of the left-wing Belarusian Party “Fair World”, whose leader, S. Kalyakin has already announced his intention to participate in the Parliamentary elections at the Congress held on 29 May.

Unlike other Belarusian political parties (e.g. UCP and BPF), which after 19 December must resolve a difficult dilemma whether “to participate in the legitimating election campaigns prior to release of political prisoners or not”, the BSDP (G) does not face this dilemma explicitly.

Therefore, if the BSDP (G)  follows the example of “Fair World” one might speak about the formation of a “constructive unit” within the Belarusian opposition, which is prepared for a domestic dialogue with th authorities thereby maintaining their domestic legitimacy.

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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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