Government freezes pay rises until after presidential campaign kicks off

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April 22, 2016 18:40

Gas, electricity and thermal energy for heating and hot water have gone up in Belarus.

The government has no resources to maintain the growth in social well-being. The Belarusian authorities have made some unpopular decisions, aspiring to balance out the economy before the 2015 election campaign. The Belarusian government accumulates resources to resume its populist politics when presidential campaign starts.

In 2013, gas, electricity and thermal energy tariffs increased 7 times. Retail prices on some cigarettes and some ‘socially important goods’ went up too. Some items were excluded from lists of ‘socially important goods’. Railway tariffs also increased substantially.

In 2013, President Alexander Lukashenko managed to bump up his approval rating to 42.6%, mainly due to pay rises in January -August 2013 by 18.8 %. Such a popular rating growth would be good during the presidential campaign. However the authorities are unable to keep up with such pace of welfare growth in the coming year and a half. Back in summer 2013 Minsk City Executive Committee Chairman Ladutko said, that “we have already reached the maximum average level in Minsk”. And Finance Minister Yermolovich said that economic imbalances in 2013 increased due to unjustified wage growth.

Meanwhile, the government cannot allow a repeat of the devaluation and currency crisis of 2011, which caused the president’s approval rating to fall to a historic low of 20.5%. However, Economy Minister Nikolai Snapkou has virtually confirmed the World Bank’s assessment that the 2011 economic crisis might repeat itself: “Their assessment is natural, based on the figures that they see. But the probability of a crisis is excluded”.

The authorities are trying to choose the lesser of two evils and pick citizens’ pockets using less painful means, i.e. by raising prices by 2-3 % each quarter, not by 30% at once. The government also searches for other the least conflicting options to replenish the budget. For example, the government daily Sovetskaya Belorussia recently published a proposal by some state experts to introduce a vehicle tax in Belarus, which would include ‘an environmental tax and a parking tax’.

In the near future the government will limit the growth in the population’s well-being in order to balance out the economy. Citizens’ pockets will be picked using means that will not stir up open outrage. Meanwhile, the authorities will propose scandalous initiatives to divert public attention from what is really happening.

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