Socio-economic model: Gradual dismantling of the ‘Belarusian social state’

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January 03, 2017 11:21
Image: TUT.BY

The Belarusian authorities continued reducing social obligations vis-a-vis the population while preserving the economic model based on state ownership. The state policy aimed to strip the population of excess income, including currency savings, in order to replenish the budget and service the public debt. For instance, the government introduced customs duty on international mail worth more than EUR 22, increased housing and communal services tariffs, froze average wage growth, reduced household incomes and introduced a tax on ‘social parasitism’.

In addition, in order to replenish the international reserves, the state encouraged the population to preserve a steady consumption level by spending their currency savings.

The Belarusian authorities decided against an advocacy campaign to promote positive image of the pension reform aiming to reduce pension benefits. The retirement age was increased by a presidential decree without a public debate due to the extreme unpopularity of this measure and fears of the authorities that publicity could have the opposite effect and drop the state institutions’ ratings.

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According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.