Summer season will calm down Belarusian protest movements
On April 26th, the authorities allowed the Chernobyl Path, the annual demonstration, to be held in Minsk.
The small number of the demonstration participants demonstrates that the opposition’s political message as well as the environmentalists’ message advocating against the NPP construction enjoy little popularity among Belarusians. The summer holiday season, which is about to start, will make it even more difficult to gather people for street protests in the coming six months.
The Chernobyl Path demonstration, which conventionally included a march through the city and a meeting, advocated against the started construction of a nuclear power plant in Ostrovets. Independent media reported about 600 participants in the demonstration and about 200 in the meeting.
The Chernobyl Path did not attract many participants, - even less than the Freedom Day rally on March 24th – which could be explained by the starting holiday season. This factor, combined with others, such as people’s low motivation to participate in mass protests, and the opposition’s low popularity, imply that political activity in Spring-Autumn 2013 will be low.
During this period, the opposition, as well as near-political activists (environmentalists) will face difficulties in organizing street protests due to these objective reasons, even without the authorities’ interventions. In turn, the authorities if necessary can use the administrative tool to reduce the protest activity.
In particular, before the demonstration started on April 26th, the police arrested several environmentalists, thereby preventing them from taking part in the rally. After the event, several journalists, working for the independent media outlets, were briefly detained. United Civil Party Chairman Anatoly Liabedzka was detained in Ostrovets, when he was trying to enter the NPP construction site.
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.