KGB makes public excuses

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April 22, 2016 17:47

Belarusian KGB issued a formal denial of documents published by an international hacker group Anonymous. The documents imply that Belarus could be involved in supplying weapons to Pakistani terrorist groups.

Comment

The fact that the KGB reacted to the scandal around the probable cooperation of the Belarusian authorities with the international terrorist network, increases suspicions against Belarus. KGB’s entry into public debate also indicates its weak position, implying it has no other means to influence the situation.

Analysis of the documents made public by Anonymous, only a small part of which applies to Belarus, casts doubts about them being fake. Otherwise, we are talking about very large-scale falsification of thousands of electronic documents. However, the reaction of the Belarusian diplomats and security agencies in this regard makes suspicions against Belarus stronger.

From the diplomatic point of view a joint response of the Foreign Ministry, KGB and the military industry of the State Committee of Belarus to an anonymous hacker group is totally asymmetrical, and unprecedented. In March 2011 the UN accused Belarus of supplying two military helicopters to the Ivory Coast. Following the reaction of the Foreign Ministry against such accusations the issue was finally resolved and the UN had to apologize.

Finally, the scandal has revealed a serious hole in the structure of information security of Belarus. Anonymous say the documents they made public were obtained from hacked servers of the Italian Cyber-Police. If confirmed, the Belarusian secret services will be responsible for leaking confidential government information to hackers as well as to their Italian colleagues.

The most likely consequence of this internal scandal would be the resignation of Foreign Minister Sergei Martynov, whose name appears in one of the published documents. However, it could happen at a later stage, when the resonance of the scandal goes down.

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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.

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