Authorities’ symmetrical response to the opposition
Yermoshina proposed introducing a law against campaigning for an elections boycott in response to calls by some opposition parties to boycott the elections. The authorities seek to preserve their position as both a player and the referee in the election campaigns.
On September 13th Chairman of the Central Elections Committee Yermoshina proposed to introduce a law that bans campaigning for an elections boycott.
Yermoshina’s initiative to ban campaigning for a boycott by law is an extension of semi-formal measures against the boycott supporters. Previously, the Media Supervisory Board for the election campaign under the Central Election Committee recommended not broadcasting speeches of candidates who called for a boycott, and the Central Election Committee, in turn, upheld the recommendation.
Despite the legal dubiousness of this proposal (lawyers say it would be in violation of the Belarusian Electoral Code), the authorities are not interested in having such a ‘vulnerability’ in the electoral law. It is therefore likely that Yermoshina’s proposal will be supported in the Presidential Administration and Deputies at a later stage and the ban on campaigning for the boycott will be formalized as the Electoral Code amendment.
The Central Elections Committee is responding to the attempts of some opposition parties to boycott the campaign. In particular, at the end of the week it was reported that the Belarusian Popular Front and the United Civic Party would withdraw their candidates, previously registered by the CEC, before the vote (i.e. before September 18th, when early voting begins.) The authorities are not only trying to save face, but also to tighten the rules of the election campaigns for political forces. If successful, the room for independent and non-actions of the opposition, such as the boycott, will be even more limited.
Finally, Yermoshina’s initiative also envisages significant restrictions on the election media campaign. In particular, it is proposed to limit the number of individual performances by candidates, as they look too “static” and are costly for media budgets, and to introduce more interactive forms: talk shows, debates, etc. In reality, this will lead to an overall reduction of opportunities for candidates to have individual performances in the electronic media, and will increase collective participation.
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.