Lukashenko rotates staff to ‘zero out’ economic policy failures
President Alexander Lukashenko issued a strict disciplinary warning to the Presidential Administration Head Andrei Kobyakov and dismissed Presidential Administration Deputy Head Andrei Tur. He also dismissed Boris Batura from his office at Minsk Oblast Executive Committee and appointed him to direct Borisovdrev.
Lukashenko has shifted the blame for failed economic policies onto executives. He wants to open a ‘new page’ in economic policies ahead of the 2015 election campaign and therefore reshuffles staff in his administration. While he uses harsh rhetoric about criminally prosecuting executives in order to improve his approval rating, he will not necessarily go ahead with his threats.
Due to the difficult economic situation, president Lukashenko is seeking ways to motivate state officials. Modernization projects have failed and money has been spent inefficiently. There is no external funding, and administrative methods for managing the economy have not brought positive results. In 2013, the GDP grew by circa 1 %, exports fell by 20 % and industrial production fell by 15%. Belarus has no resources to restore its previous rate of economic development.
The Belarusian authorities are not ready to reform the existing socio- economic model. After the IMF mission left, the country’s economic development plans for 2014 were readjusted with more optimistic figures. President Lukashenko resumed his traditional practices in economic management: staff reshuffles and threats of criminal prosecution in order to ‘increase’ the efficiency of industrial modernization. His approach will bring certain short-term results, but in the long-term will not solve all the problems in public management.
The president’s staff policy is based on constant rotation of managers at all levels of government. Thus he prevents sustainable regional clans or relations from being formed, and restricts the authority and influence of officials from growing. In addition, the president’s tough rhetoric in relation to the officials evokes positive emotions in the electorate, who are happy to be given a scapegoat.
President Lukashenko has launched serious staff shifts, which may affect the government’s composition, including the presidential administration management. As soon as the presidential campaign kicks off, Lukashenko will shift the blame for economic policy failures onto state officials.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.