No party of power will be created in Belarus

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April 22, 2016 18:20

On October 19, Chairman of the quango “Belaya Rus” Mr.Radkov announced that it would not be transformed into a political party.

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Belarusian nomenclature elites submitted to President Lukashenko’s decision. However, it does not necessarily mean that no other party of power will be established in Belarus before the next parliamentary elections of 2016. “Belaya Rus” will focus its effort on work with electorate instead.

The decision which Radkov voiced means that a group of public servants from Lukashenko’s milieu have not acquired sufficient influence over him. Thus, “Belaya Rus” is not capable of lobbying the issue of transforming their organisation into a political party. Moreover, they are obviously not in a position to decide on the transition from the current majority electoral system to proportional or mixed.

As a result, the question of political prospects for “Belaya Rus” has been postponed, at least until the next parliamentary election of 2016.

It is worth noting that the precedent of October 19 grants the head of state unwritten rights to close the issue of electoral reform in the Republic of Belarus due to the fact that at present there is no socio-political entity which could be compared to “Belaya Rus” in terms of size and influence, and could initiate political reform.

In terms of image, the precedent clearly illustrates that lobbyists from “Belaya Rus” have been defeated. For several years, they have aimed to raise the status of their organisation, voicing this idea both publically and behind the scenes. First and foremost these were Mr. Radkov, who is also First Deputy Head of the Presidential Administration, as well as Information Minister of Belarus, Oleg Proleskovsky, and Chairman of Council of the Republic, Anatoly Rubinov.

As a result, activists from “Belaya Rus” have to put up with their dwindled ambitions and focus on their traditional social activities, namely, promoting the state policy and supporting governmental initiatives in practice.

Belaya Rus” will most likely participate in other election campaigns, to local Councils of Deputies in 2014 as well as in the 2015presidential elections where, according to Radkov, it will represent “a President’s majority”. This will be achieved by providing infrastructural support for the desirable candidates (a network of public receptions, “Belaya Rus”, mass media etc. 

There is a possibility that “Belaya Rus” will use the Russian Popular Front established by Russian President Vladimir Putin as a role model for further development. On October 18, Putin doubted the expediency of transforming the Front into a political party as he believes it will immediately limit the scope of its activities. However, there is a significant difference between “Belaya Rus” and the Russian Popular Front. The initiative to establish the former came not from Lukashenko, but from Belarusian nomenclature and was viewed as a tool to control civil society. These two facts allow President Lukashenko to disparage the political ambitions of “BR” members.

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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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