Opposition is attempting to find its place amongst Belarusian authorities and EU

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April 22, 2016 19:36

The Belarusian opposition has split over the eastern policy revision by the EU, including changes in approaches to relations with the Belarusian officials. Some opposition organisations stand for a pragmatic approach and they are attempting to adapt their activities to the new environment and increased contacts between the EU and the Belarusian authorities. Others – supporters of the value-based approach – are attempting to influence the Belarusian-European agenda and regain lost positions of the democratic forces in the negotiations between Brussels and Minsk.

New Head of the EU Delegation to Belarus Andrea Victorine said in an exclusive interview with BelaPAN that the EU would continue to raise the issue of full rehabilitation of former political prisoners.

The Belarusian opposition could be divided into two camps depending on their attitude towards the Belarusian-European relations: those who adhere to the value-based approach and those with a pragmatic attitude.

The ‘pragmatic’ camp mostly includes politicians from younger generation. They have developed regional structures and long-term development strategies for their organizations. They hope for gradual changes, including with the use of the EU’s soft power, in some spheres of the Belarusian society, which are regarded by the authorities as not critical for political stability, controllability of the state and are not threatening the existing regime.

Pragmatic politicians either positively or neutrally assess the EU efforts to support reforms in those areas of concern of the Belarusian society, where the Belarusian authorities are willing to make changes.

Supporters of the value-based approach are often emigration leaders with limited regional structures and human resources. They do not see the need for reforms within the existing political system and, consequently, put forward unrealistic demands to the authorities, such as transforming the political system.

This group of politicians stands for harsh political conditions for Belarusian-European relations, although they understand their influence on policymakers in Brussels has reduced. They are afraid of completely losing the ability to influence the agenda of the Belarusian-European relations and being excluded from the negotiations between Belarus and the European Union.

Despite the fact that some opposition politicians have requested Brussels’ assistance in establishing internal political dialogue in Belarus, they are well aware that the Belarusian authorities are unlikely to respond to this initiative. Such an appeal by some opposition leaders may be regarded as an echo of the boycott/disregard strategy during the 2015 presidential campaign. As well, they must have no illusions about the level of influence that Brussels has on Minsk and about the authorities’ readiness to change electoral practices for the 2016 Parliamentary campaign.

Nevertheless, the opposition is attempting to make use of the government’s interest in normalizing relations with the European Union and softer domestic policies against the opposition. For instance, it has stepped up unsanctioned opposition activities, sometimes quite provocative, to impel the authorities to react.

The authorities may use relatively soft means to counter opposition activity in order to reduce the influence of their harsh critics on the Belarusian-European agenda.

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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.