Socio-economic model: Gradual dismantling of the ‘Belarusian social state’
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.
According to Decree No. 221 of June 23rd, 2017, deadlines for the completion of foreign trade operations have been extended from 90 to 180 days for exports and from 60 to 90 days for imports. Delayed payments entailed a fine up to 2% of the transaction cost for each day of the delay, but could not exceed the total cost of the transaction. Most companies, when working with new counterparties, require a deferred payment for a period of three to six months. Due to the new regulation, violations are likely to reduce in number, so as the fines. Trade enterprises are likely to expand the assortment list due to the supply of new products in small lots, and the assortment list of exported Belarusian goods could expand, too. The new terms for completing foreign trade transactions would enable medium and small companies on the foreign trade market, exporters and importers are likely to grow in number and the geography of export-import operations could expand.