IISEPS polls: demand for changes has grown, Karatkevich attracted new voters
On December 29th, 2015, IISEPS published results of the quarterly poll. According to the poll, the turnout at the 2015 presidential elections was 70.2% and 4% boycotted the elections, Lukashenka won 50.8% of votes, Karatkevich 22.3%, and there were twice as many supporters of market reforms in Belarus as conservatives (57% vs 27.8%). The poll results imply that there were more opportunities to attract new voters, and that Karatkevich has a chance to retain the sympathy of supporters of changes among the electorate until the next election.
Vilnius-based since 2011, Independent Institute for Socio-Economic and Political Studies is virtually the only independent research organization conducting regular, once a quarter, based on the same methodology opinion polls in Belarus. IISEPS polls are systematic surveys of opinions on a set number of issues, while other research institutions conducting polls in Belarus usually focus on a specific problem. For those who closely follow the IISEPS polls, this data was fully predictable, including the unpopularity of the boycott / disregard strategy during the presidential elections. According to IISEPS, 4% of the voters have boycotted the elections; meanwhile, since January 2015 the number of voters who replied ‘of course no/rather no’ to a question whether they were going to vote in the upcoming elections had also increased by 4%, while those who said ‘I do not know’ or ‘difficult to say’ had decreased by same 4%. In other words, the efficiency of the information campaign for a boycott has proved to be extremely low.
According to IISEPS, in October 2015, 35.6% voted for Lukashenka, 15.7% for Karatkevich, 5.2% for Haidukevich, 1.9% for Ulakhovih and 8.9% against all. Interestingly, the voting results for Haidukevich differed from the voting results for him in all previous elections – this was the first time his result was so high. The same applies to the "against all" result – this was the first election since 1994 that it exceeded 10%. Having conducted an additional research, IISEPS has concluded that Karatkevich managed to mobilise the ‘medial’ electorate, which differs from the firm supporters of Lukashenka and from conventional opposition voters.
IISEPS noted that in comparison with the crisis of 2011, there were fewer supporters of changes – if in 2011, 70% of respondents believed that the change was more important than preserving the status quo, in December 2015 – only 55.4%. However, in June 2014, they made 52.1% and in September 2015 - 52.7%. That is, supporters of changes are growing in number, only slowly, but already make over a half of voters. Less than a third of voters hope for changes and their number has decreased over the last year by 7%. 12.8% of voters said they would vote because they wanted a change. The majority of voters believe that they cope with their duties vis-a-vis the state much better than the state with its duties to them.
Overall, the democratic forces have a significant potential for gaining more supporters if they carry out effective campaigns on issues of concern to voters.
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.