Upcoming parliamentary elections

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April 22, 2016 17:46

On 21 April the President Lukashenko delivered his annual address to the National Assembly and the Belarusian people. Among other issues, the Head of state said, Belarus would not change the election system to proportional before the Parliamentary elections in 2012.

Comment

The explicit statement about the Belarusian electoral system should be interpreted unambiguously: the next parliamentary elections will be held in the traditional majoritarian format.

In the course of the past six months and particularly after the December appointment of Mr. Radzkou as the First Deputy Head of the Presidential Administration, experts and nomenclature had lively discussions about the possibility of creation of a large political party in Belarus for Lukashenko or his likely successor. There were high chances that the Republican Public Association “Belaya Rus”, headed by Mr. Radkov, a former Education Minister and a proxy of Alexander Lukashenko during the presidential election in 2010, would be used as a base for the party.

If this movement was converted into a party, the structure of the “Belaya Rus” (110,000 members as of today), its members (nomenclature, Deputies, businesses closely linked with the government), as well as tangible governmental support would create indisputably favourable conditions for the party to gain the majority in the Parliament, and the monopolized state media would ensure a powerful channel for manipulation of the public opinion.

Transition to the proportional electoral system will require amendments of the Electoral Code, as well as of the Belarusian Constitution. Article 72 of the Constitution provides for the revocation of an individual MP, impossible in case of voting on party lists. The President has the right to initiate constitutional amendments by submitting a proposal to the Parliament. Experts of the portal “Our Opinion” (http://nmnby.eu/) believe, the implementation of the initiative will take 5 to 9 months, i.e. it could still be put into action prior to the election campaign in 2012.

It is obvious that Lukashenko is in no hurry to change the electoral rules and is not ready to share power with his supporters and associates.

The history of the development of the political system in Belarus shows, the political (presidential) power is traditionally distanced from the political parties. The most recent example is the withdrawal of the loyal to the President Liberal Democratic Party and its leader Mr. Gaidukevich from the Parliamentary elections in 2008 and from the presidential race of 2010.

 

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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.