Electoral Legislation Simplification
Belarusian Electoral Code will be amended. Most of the proposed amendments are cosmetic and do not affect the electoral system. Introduced changes will facilitate the dominating electoral practices.
On January 31st Belarus’ President held a meeting on the proposed Electoral Code changes. The proposed amendments will be considered by the Parliament in September 2013. The amendments will be adopted in the autumn, and the authorities, as well as other participants of the electoral process will be able to try the novelties already during the local elections in 2014.
Amendments, discussed at the meeting, inter alia, concerned the proposal to determine the winner in the parliamentary elections during the first voting round based on relative majority principle. Officially, such innovation aims at “reducing the campaign costs”. In reality, such an amendment, if adopted, implies abolition of the second round. In 2009, similar amendments have been introduced with regard to local elections.
Another important outcome of the meeting was the criticism by the President of the proposal to enable candidates’ nomination by Republican public associations having more than 1,000 members. It is very likely that this proposal will be rejected completely. If so, the largest quango in the country, Belaya Rus, will not be affected. Belaya Rus has enough lobbying opportunities to nominate and register their candidates within already existing procedures.
The meeting participants also positively reacted to the proposal to ban the boycott campaign by already registered candidates, to an increase in candidates’ personal campaign funds, as well as to the proposal to enable candidates for local Councils to form personal funds. In addition, it was proposed to enable candidates to pay for printed campaign materials from own funds, rather than from the state budget.
Thus, as anticipated, the proposed changes are overly cosmetic. The current candidates’ nomination and registration procedures remain unchanged, and the authorities attempt to make them more effective to serve their purposes - primarily via changing the procedure for determining the winners in the parliamentary elections. The latter suggests that the authorities recognize the problems with populations’ electoral support and seriously prepare for the low turnout during the next election campaign.
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.