Approval of the Social and Economic Development Programme
Alexander Lukashenko signed the 2011-2015 Social and Economic Development Programme, which was part of his election campaign.
The Programme envisages that in the following five years, the GDP will grow by 62-68%, industrial output by 80-90%, and capital investment by 90-97%. By 2015 the country will reach a surplus in foreign trade by 0,5-0,6% of the GDP (currently a deficit of 15%). The active income will be increased by 70-76%.
It is planned that the financing of investment and the production rate growth will be achieved due to credits and external resources. Obviously, the burden will fall on the banking sector, as well as on the state budget of Belarus, which will be forced to partially compensate the interest rates to provide these resources. There is a big question mark so far regarding the attraction of foreign investments.
Adoption of an a priori impracticable Programme could be explained by bureaucracy or by lack of resources for development of a new one, as well as by inability/unwillingness to acknowledge openly the failure of the previous development paradigm and the need for painful and unpopular structural reforms, which will result in lower revenues and increased unemployment. Moreover, it is also likely that the authorities hope to receive stabilization loans or to sell part of the state property and to “skip through” (with minimal reforms implemented) the troubles against the background of the increasing world prices and changes of the world’s geopolitical situation. In any case, the implementation of the Programme is not feasible, even with the parameters of macroeconomic policies Belarus has offered to Russia.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.