Belarusian security services increase visibility ahead of presidential campaign

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April 22, 2016 19:15

Belarusian security services are increasing their visibility in the media in order to set an appropriate background for the presidential elections. They seek to demonstrate socio-political stability to the voters by showing they are in control of corruption, economic crimes and Belarusian participation in the armed conflict in Ukraine. As elections draw closer, the security forces are likely to step-up their visibility in the media. 

Last week, KGB Chairman Vladimir Vakulchik held a press-conference, where he spoke about arresting spies and charging top management at Motovelo with illegal capital and equipment export. 

As a rule, the Belarusian security services enhance their visibility in the media a few months before the election date and before the start of the presidential campaign. At this stage, they have not yet increased their attention to the opponents of the Belarusian leadership. 

By increasing the visibility, the security services are attempting to demonstrate their importance vis-a-vis senior management and high efficiency in the fight against corruption in public institutions. For instance, the media reported about the KGB arresting the head of department for avia-equipment repairs of “Aviation”, the state institution of Emergencies Ministry, on corruption and abuse of authority charges. 

President Lukashenka announced the following round of the anti-corruption campaign after the events in Ukraine in late 2013 – early 2014, which led to Yanukovych’s resignation. Back then, President Lukashenka named corruption among the two major culprits for the revolutionary change of power in Ukraine: “the collapse of the state, which occurred in Ukraine, was due to the collapse of economy and terrible corruption. These are the two reasons why the state was ruined”

The Belarusian security services have received two tasks – to counteract revolutionary developments in Belarusian society and to step-up the fight against economic crimes. And the KGB is demonstrating its efficiency in this fight. Last week, the KGB detained the owner of "Motovelo" as well as other managers of the company and charged them with illegal capital withdrawal and illegal export of equipment. In addition, Vakulchik said that other government officials might be ‘brought to justice’. This statement ahead of the presidential campaign aims to mobilize bureaucratic apparatus and to intimidate business. 

In addition, the KGB head reiterated that Belarusian citizens, who participated in the armed conflict in Ukraine as mercenaries would face criminal charges. Despite frequent threats, so far, there were no cases when such mercenaries would have been prosecuted in Belarus. Nevertheless, the Belarusian secret services are closely watching Belarusian activists, who are suspected of being ‘mercenaries’. As Vakulchik said, “People kill people. How can you treat this? Then they come here having the experience of killing people. We must think about this problem and solve it”. 

Most likely, by such statements, the Belarusian authorities seek to confirm their ‘balanced’ position over the armed conflict in the Donbass region and to prevent negative reactions from both, the Kremlin and Kyiv. 

Meanwhile, the House of Representatives has passed the amendments to the Criminal and Criminal Procedure Code of Belarus in the first reading, which extended the application of article "High Treason" of the Criminal Code. 

Ahead of the 2015 presidential election, the authorities regard economic situation and corruption as the main threats. Depending on the behaviour of the opposition candidates and the level of popular discontent the security services might step up their attention to the political opposition.

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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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