Russia ramps up information pressure on Belarus over Ukraine
The authorities in Minsk are not yielding to diplomatic pressure from the Kremlin over their independent stance in the Russo-Ukrainian crisis. While the Belarusian authorities have slightly mitigated their position, they still criticise the Eurasian Economic Union founding treaty, signed in late May. Information pressure on Belarus has been stepped up in order to heighten tension between Belarus and Ukraine.
Last week, President Lukashenko met with Russia’s Foreign Minister Sergey Lavrov in Minsk.
During the meetings, the Foreign Ministers of Russia and Belarus had four major issues on the table: bilateral relations, cooperation within international organisations, cooperation within the Union State, and within the Eurasian Economic Union. The parties also discussed the crisis in Ukraine, which, presumably, topped their agenda.
With his visit, Russia’s Foreign Minister Lavrov aimed to prompt Belarus to review her assessments of the Russo-Ukrainian crisis and to reconcile her positions with those of the Kremlin’s over events in south-eastern Ukraine. The Kremlin managed to mitigate Belarus’ criticism of the Eurasian integration. As regards events in Ukraine, Belarusian diplomats have not made any public statements, which could imply the success of the Lavrov’s mission.
Overall, Belarus’ Foreign Minister Makei positively assessed the EaEU founding treaty: “perhaps, each participant in the process was not entirely happy with the end result at this stage, and we believe that the current agreement in substance does not quite match the initially declared goals”. In addition, President Lukashenko spoke in subdued tones about the need to hold a joint Russo-Belarusian Ministerial Council “in order to make some corrections, in particular, as regards the Eurasian Economic Union activities”.
As regards the Russo-Ukrainian crisis, Russian Foreign Minister has only succeeded in making Belarus’ officials disapprove of the outburst against Putin by Acting Ukrainian Foreign Minister Deshchytsa and mouth general phrases about the need to resolve the crisis in Ukraine by peaceful means.
Meanwhile, the Ukrainian media, with reference to Russian sources, published several news pieces discrediting Belarus’ authorities. For instance, during Lavrov’s visit to Minsk, a taped conversation - allegedly between Lukashenko and Viktor Yanukovich’s son requesting asylum for his father in Belarus - was leaked on the internet. The Belarusian authorities have not reacted with official statements to this information, with the only exception of a comment by the president’s assistant, Natalia Petkevich: “neither I nor the Belarusian president had any conversations with Yanukovich’s sons. Given the current level of technology development, anything can be simulated anytime”.
Meanwhile, a Russian prankster with the nick-name Vovan222 confirmed that he had set up the Belarusian president. He claimed however that the audio recording, which was published on the internet, was made by someone else, not him.
It is worth noting that some topics raised in the audio recording were presented from the Kremlin’s propaganda viewpoint. For example, the Belarusian president was prompted to recognise today’s Lugansk and Donetsk regions as a new state – “Novorussia” ["New Russia"] – led by former Ukrainian President Viktor Yanukovych.
In addition, right after Lavrov’s visit to Belarus, the Ukrainian media picked up information that Belarus’ military airfields might host Russian nuclear bombers Tu-160. Most likely, this was yet another hoax aiming at creating tension in Belarusian-Ukrainian relations.
Despite the fact that the Kremlin has started using the information war tools, the Belarusian leadership attempts to maintain an independent stance in the Russo-Ukrainian conflict. However, Belarus’ total dependence on Russia prevents her from finding adequate solutions to the Kremlin’s propaganda pressure.
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.