Oppositions reaction to the news about possible deployment of Russian air base in Belarus

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April 22, 2016 18:29

On April 23rd, Russian Defense Minister Sergei Shoigu said in Minsk that by 2015 Russian airbase will be deployed to Belarus.

Nationalists, conservatives and a number of Belarus’ social movements have strongly opposed the idea, referring to the Belarus’ sovereignty. Liberal and left-wing parties take restrained and constructive stand. At the same time, the opposition has generally refrained from making collective statements in this regard.

The statement by Russian Defense Minister Sergei Shoigu received a strong response from the Belarus’ political opposition. In particular, the Organizing Committee of the Belarusian Christian Democracy party leader, Vital Rymashevski, said that such plans were in violation of the neutrality principle declared in the Belarus’ Constitution. “European Belarus” campaign leader, Andrei Sannikov, said that such plans would strengthen the dictatorship and called upon the EU not to resume cooperation with the Belarusian authorities.

The opposition “trio” members were almost in unison. BPF leadership announced that the party would protest against the deployment using all available non-violent means. “For Freedom” movement also strongly opposed the plans, referring to the constitutional principle of neutrality. “Tell the Truth” movement stated that it was Russia that needed the airbase, not Belarus and that such project could have economic benefits for the Belarusian budget.

Liberal and left-wing parties’ reactions to the Shoigu statement were less explicit. United Civil Party member and former Belarus’ Defense Minister Kozlovski praised Lukashenko’s statement on April 26th about the potential supply of Russian fighter jets and S-300 missiles for the Belarusian army as strengthening Belarus’ defense capacities.

In turn, the Liberal Democratic Party leadership urged to have a constructive approach and to hold parliamentary hearings. Representatives of the newly formed Leftist Platform refrained from comment.

Thus, the majority of political actors took advantage of the situation to outline their positions clearly. Regardless of the existence of semi-formal opposition coalitions (‘Trio’, Leftist Platform) there were no joint statements made. The individual character of the statements made by the opposition leaders are the effects of the centrifugal trends in the Belarusian opposition, which have intensified during the parliamentary election campaign in 2012.

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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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