Rumors about early Parliamentary elections meant to test the loyalty of the opposition

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April 22, 2016 17:48

Statements by Belarusian politicians in response to an information leak to the Russian “Kommersant” show the split of the opposition around the issue of participation in elections. The breaking point is whether to condition participation in the elections with the release of political prisoners and rehabilitation, or not.

On November 9, the Russian newspaper Kommersant, referring to an anonymous source in the Belarusian Parliament, published information that the elections to the House of Representatives might be held in April 2012.

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The reaction of the leaders of the United Civil Party and the Left Party “Fair World” Mr. Lyabedzka and Mr. Kalyakin respectively on the news about possible early elections suggests that the opposition (at least registered and well-known parties) are willing to participate in the parliamentary elections and to start a dialogue with the authorities about democratization of the electoral law.

The non-registered party “Belarusian Christian Democracy” and one of its leaders Mr. Rymashevsky along with “Tell the Truth!” social movement and its leader Uladzimir Niakliaeu made strong statements against participation in the elections prior to the release and rehabilitation of all political prisoners.

“For Freedom” movement took evasive centrist position. Its leader and Chairman Mr. Milinkevich did not say anything, however his Deputy Mr. Hubarevich said the movement has not yet made the decision about participation in the elections while there were political prisoners, however expressed their willingness to participate in the elections if the political system of Belarus becomes a subject to democratization and liberalization.

Therefore on the eve of the Parliamentary elections in Belarus there are two main streams in the Belarusian political camp. On the one hand, there are “reasonable critics” among the medium and large political parties who are willing to participate in elections under certain conditions (liberalization of laws on elections), and who do not threaten the authorities with a boycott of the election campaign. On the other hand, there are the so-called “new wave” politicians with more radical views (BChD, “Tell the truth!”).

The organizers of the information leak received a fairly clear picture of what oppositional political forces occupied a constructive position vis-?-vis the legitimacy of the parliamentary elections in 2012, an issue the most important for the authorities. Regardless of when the elections take place - in April or September - the Belarusian authorities will use this campaign as a stake in the next round of bargaining with the West and, most likely, while negotiating for a new IMF loan.

Regardless of when the elections take place - in April or September - the Belarusian authorities will use this campaign as a stake in the next round of bargaining with the West and, most likely, while negotiating for a new IMF loan.

In order to prepare for bargaining, it is particularly important for the authorities to know that opposition politicians do not plan to organize a joint boycott campaign and ensure the domestic legitimacy of the elections with their participation. Apparently it was the main purpose of the information leak published by Kommersant, i.e. to clarify the situation with the boycotting of the elections by the opposition. In fact, the opposition parties were also interested in finding out the format of the upcoming campaign, therefore the provocative article by Kommersant caused a generous stream of public statements by top personas of the Belarusian opposition.

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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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