Belarusian security officials in quest for additional budget revenues
Belarusian security officials are attempting to step up their fiscal role by taking away profits from large private businesses and fraudulent state managers. The law enforcement agencies have expanded the geography of their activities and enhanced control over export-import operations, activities of foreign representations of Belarusian state-owned enterprises, and commodity distribution networks. Apparently, the state is aiming to use the security forces to improve the public sector efficiency and to dodge denationalisation and structural reforms.
In distribution networks of Belarusian enterprises in Russia, crime, bureaucratic "feeding troughs" and nepotism often flourish.
Yet ongoing public debate about economic liberalisation and decriminalisation of entrepreneurial activity has had zero effect on conventional relations between business and the state in Belarus. On the contrary, along with the enhanced role of the power bloc in the Belarusian governance, the authorities have stepped up the criminal prosecution against large private and public businesses.
Different controlling and law enforcement agencies are competing for influence and control over different economic sectors. For instance, the KGB has expanded its control over transport and recently reported detentions among managers at the transport inspection of the Transport Ministry. In turn, the Prosecutor General's Office has focused on foreign economic activity of state enterprises and commodity distribution networks. Belarusian law enforcers have detained Ernest Alexeyev, Yaraw Holding Company Head of the Board, who worked on the Turkmen market and was the largest supplier of cargo, passenger and special machinery for MAZ and Amkodor to Central Asia.
In recent months, the KGB has been effectively used as a supplementary ‘fiscal instrument’ in order to replenish the state budget through criminal prosecution of large private business (case of Arbuzov) and top managers at public enterprises (MTZ, MAZ, BelAZ, Gomselmash). Apparently, the state aims to boost the efficiency in the public sector through anti-corruption pressure and by taking away surplus income from fraudulent state managers.
Overall, the state hopes to retain its dominant role in the economy and to dodge structural reforms by empowering the law enforcement to supervise the most problematic sectors of the economy in order to boost managerial discipline.
According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.