Falling trust in Belarusian authorities comes with lower ratings of opposition
Amid falling ratings of the state and public institutions, the Belarusian society has demonstrated high adaptability and dropped its paternalistic demands vis-a-vis the state. Yet the opposition has been unable to popularise alternative vision of socio-economic reforms and boost its ratings in society. In the near future, social tension in society is unlikely to transform into open protest activity.
According to the IISEPS nationwide poll, President Lukashenka’s electoral rating declined in March 2016.
It is becoming harder for the Belarusian authorities to weasel out of liability for socio-economic failures and blame external factors for them. According to an independent poll, the population equally blames the Belarusian government (48%) and the president (47%) for the deteriorated situation in the country. In his public statements, President Lukashenka has not attempted to shift the responsibility exclusively on Kobyakov’s government, which is unlikely to be replaced in the near future.
Starting from the post-election period in late 2015, President Lukashenka’s electoral rating has been consistently falling. In September 2015, 45.7% of Belarusians would vote for him, in December 2015 - 33.3% and in March 2016 - only 27.3%. However, the president’s popularity has not dropped below that in 2002 (26.4%) and during the crisis of 2011 (20.5%).
The president is likely to have lost support among his traditional voters. His previous paternalistic policy had allowed him to count on the loyalty of broad socially vulnerable groups. However, now these groups, more than others, are beginning to feel the effects of the state opting out of social protection in the pension system and healthcare services, and cutting subsidies on public transport and utilities.
In recent months, due to the new social policy, tension among pensioners has been growing. Previously politically inactive pensioners are now insisting on resumption of social guarantees.
Besides filing legal petitions to the authorities, pensioners are starting to participate and organize unauthorized demonstrations to support their demands.
That said, independent pollsters have noted the general trend towards reduction of social requirements vis-a-vis the state regarding social guarantees. Yet the state has not made efforts to ensure support among new electoral groups with lower paternalistic expectations. Most likely, the Belarusian authorities want to wait out the crisis and hope that Russian economy recovers and that the Belarusian economy would follow.
The falling trust in public institutions has not improved ratings of opposition leaders and parties, rather the opposite - their popularity has slumped. For instance, amid reduced presidential electoral rating, rating of the only opposition candidate in the 2015 elections Tatiana Karatkevich has fallen to 6.9%. Incidentally, this trend is typical for post-election Belarus.
Amid lifted sanctions against the Belarusian authorities by the EU and some fatigue from the conflict in Ukraine, pro-European moods in society have somewhat recovered. As for Russia, 26% of Belarusians think she will help to overcome economic recession in Belarus, while the majority is against Belarus’ unification with Russia into one state - 52.4%.
The Belarusian authorities are likely to restrict communication opportunities for opposition candidates during the parliamentary elections, especially if their popularity starts growing along with citizens’ protest activity. Regardless of the public demand for changes, the authorities are unlikely to reform the existing socio-economic model without significant protest pressure from society.
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.