A new development stage in the left forces’ coalition

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April 22, 2016 18:29

On April 17th in Minsk, “Green” Party, “Fair World” Belarusian Left Party and the organizing committee of the Belarusian Labour Party leaders held a joint press conference.

So far, the political coalition between the leftist parties is limited to the creation of an informal ideological leftist platform. However, there is some progress in the building up of a coalition, which is evidenced by joint public appearances of the left-wing parties’ leaders.

The leftist platform was created on April 12th, at a joint meeting of the Belarusian Social Democratic Party (Hramada), Belarusian Left Party “Fair World”, “Green” Party and the organizing committee of the Belarusian Labour Party. This platform is not a formal political bloc, rather a framework for joint actions by ideologically close forces.

The ‘Platform’ declared a joint action to be held on May 1st, as well as the creation of a leftist information web portal. Organizers said the platform would not have a formal leader. However, on April 17th, during the press conference they did not rule out the nomination of a single leftist candidate for the 2015 presidential elections.

Inside the Belarusian opposition, coalitions form due to both, the political momentum (upcoming local and presidential elections) and the lack of human and financial resources which the opposition parties and movements could contribute individually. The most explicit distinctive feature of the Platform is that it is ideologically orienting towards the promotion of social-democratic values and workers’ rights’ protection.

Political capacities of the new leftist platform (as well as the ‘trio’s’ BPF, For Freedom and Tell the Truth and other opposition groups and individual players) will be tested soon – during the local elections in 2014. The 2012 Parliamentary campaign has demonstrated that the opposition is more prone to scattered actions, rather than preserving coalitions before, during and after the elections.

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Growth in real wages may disrupt macroeconomic balance in Belarus
October 02, 2017 12:12
Фото: Дмитрий Брушко, TUT.BY

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.

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