Execution of terrorists makes Lukashenko more dependent on power forces
On March 13, the Commission on Presidential Pardon, considered the clemency appeal of Mr. Kovalev, one of the two sentenced to death for committing a terrorist attack in the Minsk metro. In the evening of March 14, media reported President Lukashenko had rejected the pardon appeal of Vladislav Kovalev. On March 17, the world learned about the execution of Vladislav Kovalev and Dmitry Konovalov.
The refusal of Lukashenko to pardon one of the sentenced to death terrorists implies the growing influence of the power elite on the President. The increased dependence of the country’s leader on the security forces reduces the means of governance and is likely to result in repressions being used more frequently.
It also means that Lukashenko made his choice in favour of the interests of the power elite, primarily the KGB and the Investigation Committee. These two agencies have significantly strengthened their authority in the course of the investigation of the attack, and reinforced it after the execution of convicts.
Pardon of the convicted Kovalev, who has appealed with appropriate request, could be interpreted as doubt of the results of the investigation and of the verdict by the president, particularly, against the backdrop of domestic and international criticism of the course of investigation and trial, which received wide public response. Thus, the final word of the president was extremely important for the investigating officers of the Prosecutor’s Office, the MIA and the KGB.
Moreover, life-saving of Kovalev could potentially increase the probability of revision of the case, in particular, since Kovalev demonstrated during the trial his willingness to defend his interests actively, when he denied his earlier testimony and talked about the pressure by the investigation team. Finally, Mr. Kovalev is an important witness of the investigative practices used by the law enforcement of Belarus, which could be regarded as a threat to the security forces, if he disclosed that information. For example, previously a number of Belarusian political prisoners and refugees talked about the use of torture by the KGB.
Therefore, those representatives of the power elite, who received promotions and new titles, were interested in the death sentence: it allowed for the case to be completed in full and with minimal risks for the elite. Such outcome was particularly important for the management of the Investigative Committee, which owes its origin to the investigation of the terrorist attack.
At the same time, by upholding the execution, President Lukashenko lost the opportunity to meet the interests of a significant part of the population, who distrust the official outcomes of the trial: in December 2011 independent polls referred to 43.4%. As a result, the president has limited his own domestic political space for maneuver, and increased his dependence on the power of elite, which since late 2010 consistently had been increasing its influence in the government.
It should be mentioned that the President’s decision was made public one day after the meeting of the Commission on Pardons took place. We assume that the negotiations within the elite continued right to the very end and have been extremely tough.
As a result of the terrorist attack on 11 April 2011 in the Minsk metro station “Oktiabrskaya”, 15 people were killed, 32 seriously injured, 72 suffered less severe injuries and 283 received minor injuries. In a previous explosion in Minsk on July 4, 2008, 59 people were injured; on September 22, 2005 in Vitebsk – 55; on September 14, 2005 in Vitebsk - 2.
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.