Former Law Enforcement Officers Establish a Government in Exile
On May 14 in Vilnius, Belarusian emigrants and former intelligence officers, Vladimir Baradach and Anufriy Ramanovich, announced the establishment of the Transitional Government of Belarus in exile.
The initiative is currently at the stage of an “auction bid”. So far, Vladimir Baradach has only voiced the structure of the shadow government which would include a Committee, a Shadow Cabinet, an Advisory Board consisting of the leaders of political parties, a Council of Elders consisting of the most reputable Belarusians and other structural units. However, this proposal is unlikely to be widely supported by the Belarusian opposition due to the reputation of the former military and former law enforcement officers who now live abroad. A major obstacle to this would be the charges of collaboration with the KGB and the desire to split them [the opposition], as the opposition pointed out on May 14. Spokespersons for the major opposition movements (The United Civic Party, the “For Freedom” movement, Tell the Truth! and others) have clearly expressed their strong disagreement with the idea of a shadow government being set up.
Moreover, the initiative is unlikely to be supported by the Council of the Belarusian National Republic (BNR) operating in the USA, which claims to be the only legitimate body to represent Belarus’ interests abroad. The Council had previously gained support of the highly respected Belarusian cultural and political activists, which significantly hinders the creation of the coordinating units of the government, such as the Advisory Board, the Council of Elders and the Shadow Cabinet.
Finally, no objectives have been set apart from an abstract radical idea to topple Alexander Lukashenko. The initiative was supported by very few Belarusian emigrants (currently, only 4-5 people) who have cooperated with the Security Forces in the past. Therefore, there is little hope for broad support.
The future of the transitional government in exile depends entirely on whether it will gain support within the political opposition. Statements made by leaders of radical movements (the unregistered Belarusian Christian Democracy party, the \"European Belarus\" campaign) give grounds to assume that they are likely to support this initiative. Thus, on 17 May, Vital Rymasheusky, a presidential candidate in 2010, publicly supported this project. He also praised the leadership qualities of Alexander Sannikov, also a 2010 presidential candidate. On 15 May, Sannikov’s close ally, Dmitry Bondarenko said that in his estimation, about 80% of independent journalists cooperate with the KGB. In this case, the probable scenario would be support of the project by most members of the radical opposition under Sannikov’s leadership. After his release, he has not demonstrated any political activity in Belarus although he needs a long-term perspective and field for his activity after the parliamentary election in 2012.
If the project is successful, it might open up an opportunity for Sannikov. On the other hand, if Sannikov and his team support the project of the former law enforcement emigrants, it would give this initiative political weight. As a consequence, the split within the Belarusian opposition, both inside and outside of the country will enlarge. The division of the opposition into smaller, radical units (headquartered abroad) and more structural units (conducting civil and political campaigns within the country) will continue.
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.