The Federation of Trade Unions and the "Belaya Rus" will be the main competitors in the parliamentary campaign
On 9 July, 110 district election commissions which will operate during the Parliamentary election campaign in September were set up.
The formation of district election commissions went according to plan with no sign that the upcoming election campaign will differ significantly from the 2008 campaign. A much greater influence on election outcome is exerted by local election commissions, which will be formed in early August.
According to the estimates of Belarusian human rights activists, minor progress has been observed at this stage of the campaign: in 2012 the proportion of the opposition in district election commissions rose to 3.3% versus 2.2% in 2008. This could be explained by the increased activity of opposition parties which have nominated 199 representatives against 118 in district commissions in 2008.
However, pro-governmental public organizations remain the most active and successful ones in nominating their representatives. Thus, the Federation of Trade Unions of Belarus has nominated 279 members, 206 of which were included in the commissions (or 14.4% of the composition of all commissions.) The public association \"Belaya Rus\" has nominated 110 members (106 of them included, or 7.4%), the Belarusian Republican Youth Union has nominated 108 members (86 on, or 6%).
As a result, namely these three organizations are leaders in terms of representation of their members in district election commissions.
It can be concluded from this fact that the main struggle for influence in the campaign will take place between the Federation of Trade Unions and the \"White Russia\", which have repeatedly stated about their desire to play a more important role in the government policy of Belarus (specially on political plans of the \"Belaya Rus\", see the previous issue of monitoring).
In this case, the formation of local election commissions, to be completed by 8 August 8, will become the next step in this confrontation. Traditionally, the outcome of elections in Belarus is determined to not by district, but by local election commissions, which are directly involved in vote count and report the results to the district. Therefore, a more accurate prediction of the likely outcome of the campaign can be made after 8 August.
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.