Lukashenko delays government’s resignation due to staff scarcity

President Lukashenko lacks a pool of trusted experts to nominate government officials capable of reversing todays’ negative economic trends. Some unpopular measures are planned for 2014 and the current government will be held responsible for their deliverance.

Despite failure to achieve the projected economic development indices, and Lukashenko’s threats, the government remains intact. Back in early 2013, the president emphasized that “a repetition of the situation of the previous year would result in the Government’s immediate resignation”. But recently, Lukashenko gave the current Government another chance, noting that “the situation is unlikely to change radically in the remaining month”. It should be noted that the government managed to meet some key economic indicators, such as size of GDP, industrial production volumes and fixed asset investment. The main objective of the socio-economic development plan – income growth – was achieved too.

The government’s priorities will change in the immediate future. Instead of trying to implement the unrealistic gross performance indicators, Lukashenko wants the Government to focus on improving the competitiveness of Belarusian industry. Lukashenko emphasized this and proposed to set ‘warehouses unload’ as the main criterion for evaluating the Government’s work. The president has actually confirmed the failure of modernization plans and acknowledged the problem with overloaded stocks at modernized enterprises. The Government reported that over half of the 711 largest enterprises failed their modernization plans: about 20% could not cope with modernization, and 37% lag behind schedule.

In addition, it seems that Lukashenko’s harsh rhetoric and threats vis-à-vis directors and managers, has had an opposite effect to mobilization – it has paralyzed managers’ initiatives.

As the current government’s credibility has not been exhausted entirely, it gives the president the opportunity to hold it responsible in the future for implementing unpopular measures aiming to replenish the state budget at citizens’ costs. The draft budget for 2014 lists revenues from vehicle tax, which has been proposed recently by the Finance Ministry. It is noteworthy that this proposal was so unpopular that it even sparked outrage among some Parliamentarians. According to the draft budget, in 2014 prices will go up on excisable goods and services subsidized from the state budget.

President Lukashenko retains the possibility for him to change the Government before the 2015 presidential campaign and hold it responsible for many socio-economic failures in recent years. Meanwhile, Lukashenko does not have a huge pool of managers who he could trust with holding top-level positions in the government.