Opposition coalitions form according to core-periphery model
On May 20th, in Minsk, the opposition coalition, so-called “Trio” - the BPF, “For Freedom” Movement and “Tell the Truth!” - announced the launch of a joint ‘Popular Referendum’ campaign.
Important opposition group has launched a long-term strategy for joint action. Inside the Belarusian opposition two coalitions continue shaping up - the “rightist” and “leftist”. Simultaneously, political periphery forms from various parties and groups within Belarus and abroad.
The “Trio” management emphasized the informal nature of their coalition, implying they created a platform for coordination of joint political action, rather than merging parties and programmes. The coalition’s peculiarity is its long-term cooperation. Participants plan to cooperate in the next three political campaigns: 2013-2014 local elections, 2015 presidential elections and 2016 parliamentary elections.
Content wise, the “National Referendum” is still uncertain. During summer, its initiators plan to tour 30 Belarusian cities to meet with the electorate and to formulate the most pressing social and political issues. Then, during the local elections, they will launch a petition campaign for a referendum on issues identified after consultations with citizens and experts. The collected signatures will be used to put pressure on the government to speed up political transformations. Coalition members do not rule out the potential nomination of a coalition’s single candidate for the presidential elections.
Thus, currently, at least two coalitions form within the Belarusian opposition: so-called “rightist” (“Trio”) and so-called “leftist” (Leftist Platform). The “Trio” coalition seems to have better coordination, as it has already presented a coherent approach to foreign and domestic policies (in its recent statement “Greater Europe for Belarus”).
Finally, there is a variety of political parties and organizations outside the coalition process. Firstly, the United Civic Party, which single-handedly promotes its “primaries” project (the principle of defining a single candidate in the presidential elections), and secondly, a number of non-registered organizations in Belarus and in exile, which, with varying degrees of radicalism call for the elections’ and regime’s boycott.
The latter include the Belarusian Christian Democracy Organizing Committee (Mr. Rymashevski), European Belarus campaign (Mr. Sannikov). As anticipated, they negatively reacted to the “Trio’s” initiative. In particular, Sannikov accused the “Trio” members of an attempt to legitimize the dictatorship, Rymashevski called the project ‘hazy’, Belarusian Social Democratic Gromada Chairman Shushkevich called “Trio’s” initiative a nonsense, and CCP BPF Chairman Pozniak – ‘a joke’. Alternatively, the media welcomed the “Trio’s” idea.
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.