Single candidate from democratic forces unlikely to be nominated before year-end

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April 22, 2016 18:51

Influenced by events in Ukraine, and with Belarus facing the threat of losing independence in the process of Eurasian integration, the Belarusian opposition has stepped up talks about nominating a single opposition candidate. However, the opposition parties and movements do not have a common vision or strategy for winning the elections in Belarus, which bars them from uniting around a strong opposition leader. As the ‘Ukrainian factor’ wears thin and Election Day draws nearer, contradictions and competition among the opposition structures around ‘a single opposition candidate’ will strengthen.

On May 19th, Belarus’ opposition leaders held regular consultations concerning the election of a single opposition candidate for the 2015 presidential elections.

Most opposition structures reached an agreement that a single candidate would be nominated and elected by the Congress of Democratic Forces. They are still to determine the Congress’ date. The presidential elections in Belarus should be held no later than November 20th, 2015. Meanwhile, the opposition leaders failed to agree on how to nominate Congress’ participants, who would actually vote for a single opposition candidate. Each opposition party seeks to have the most advantageous procedures for nominating its members to the Congress, regardless of the plans to nominate its candidate as ‘a single candidate’. 

Currently, only two opposition parties have publicly announced their intention to nominate a single candidate – “Tell the Truth!” (Uladzimir Nyaklyaeu) and the United Civic Party (Anatoly Lebedko). “For Freedom” Movement has started to prepare to nominate its candidate as ‘a single candidate’

Interestingly, after the Ukrainian events, ‘the European choice’ has considerably lost popularity among the Belarusian population. Nevertheless, the Belarusian opposition parties and movements remain committed to European integration. They have not developed any strategies on how to build relations with Russia after Belarus joins the Eurasian Economic Union (EaEU).

The ‘People’s Referendum’ initiators reacted negatively to Belarus signing the EaEU founding treaty. In a joint statement, they called for "increasing ties with the European Union", and underscored that the Eurasian integration project “is not a union of peoples, but a union of leaders, in essence, a conspiracy”.

Almost all major opposition players uphold this position, except the former communists, the United Leftist Party “Fair World” and some marginal opposition groups. The “Fair World” members welcomed the Soviet-style rapprochement, and assessed events in Ukraine along the lines of Kremlin propaganda. “Fair World” leader, Vladimir Kalyakin, has not yet publicly announced his presidential ambition, but he is a likely contender for ‘a single opposition candidate’ status.

So far, the Belarusian authorities have managed to control pro-Russian moods in society and prevented a strong leader, who could compete with President Lukashenko, from emerging. However, among the pro-Russian electorate there is a significant group which does not trust President Lukashenko and is discontent about the pace of Eurasian integration.

The Congress of Democratic Forces, at which a single candidate from the opposition will be nominated, may be held in late 2014 - early 2015. Most major opposition groups in Belarus are committed to holding such a congress and are ready to participate in it.

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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.