Civil society in Belarus is increasing its influence
On May 7th, Minsk City Executive Committee refused to enter into a contract for the construction of a recreational centre in the centre of Minsk.
Protests against the compact construction become an important factor in the civil society formation and consolidation in the capital. These developments had non-political nature.
The Minsk City Executive Committee’s non-approval of a construction project to be implemented in a green area in the city centre was a result of protests by about a thousand local residents who sent their appeals to the Prosecutor’s Office and the State Control Committee asking to abandon the project.
This movement’s mobilization potential is fairly large, given its non-political nature. As a rule, such protests are carried out as pickets and collective appeals to the authorities. In particular, one of these appeals - against the residential building construction on the playground in Tsnianskaya Street - was signed by circa three housand people.
Citizens’ protests and the Minsk City Executive Committee’s decision to waive the construction project do not necessarily have a cause-effect relationship. But clearly, Minsk residents’ civil activity is increasing. In particular, in early April, a number of community initiatives, advocating against sporadic commercial development in vaious Minsk districts signed a memorandum of cooperation.
Organizational core of this residents’ movement is non-registered public association “Evroperspektiva”, which was denied registration by the Justice Ministry two times. The association is led by Victor Yanchurevich, a candidate for Parliament’s Deputy in 2012.
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.