Lukashenko attempts to overcome international isolation via media

Category status:
April 22, 2016 18:24

On January 15, President Lukashenko held a press conference for Belarusian and international mass media. The press conference lasted for almost 5 hours, was attended by over 350 journalists representing 285 media.

The main reason for the frequent meetings of Alexander Lukashenko with journalists in the last six months is the Belarusian President’s international isolation. Ad hoc interviews and press conferences partially fill in the vacuum in the absence of real international political activity.

The large number of international journalists taking part in the January press conference, emphasize the trend, which started in early 2011: during his 4th term, President Lukashenko is increasingly focusing on the Eurasian integration, and makes most of his foreign visits to Moscow. As a result, the authorities are trying to compensate for the “Kremlin misbalance” using information policy tools.

President Lukashenko’s public activity has increased since autumn 2012, for example, in October, he gave an interview to MIR TV and Radio Channel (CIS), the Independent and BBC (UK), he also called a traditional press conference for journalists from Russian regional media. In November and December he was interviewed by Reuters (UK) and met with members of the CIS media Editors Club. All these events took place in Minsk.

Content-wise the press conference on January 15 was of a routine and populist nature as usual. The President indicated there will be no major changes in the foreign policy of Belarus. In particular, he made it clear he was not going to release political prisoners without them asking for pardon. Thus, it is anticipated that in the near future the political conflict between Belarus and the EU and the U.S. will remain frozen.

Similar articles

Growth in real wages may disrupt macroeconomic balance in Belarus
October 02, 2017 12:12
Фото: Дмитрий Брушко, TUT.BY

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.