“Sannikau factor” reduces probability of election boycott
The news about potential pardon of Sannikau strengthens positions of the opponents of the boycott of the parliamentary elections and gives the opposition involved in negations a reason to postpone the adoption of a unanimous decision about the format of the election campaign. De facto it implies there will be no joint boycott of the 2012 elections.
Taking into account President’s Lukashenko readiness to pardon prisoners if they appeal for clemency, which he repeatedly voiced, increases chances of Sannikau’s release. On 23 January expired the one-month-review period and the appeal was submitted to the Presidential Administration. Indeed, Lukashenko knew about Sannikau’s appeal all along and his demonstrative adherence to formalities while considering his appeal implies only his personal dislike of Sannikau. It also explains the delayed review of the petition within the Administration, moreover, last week President Lukashenko was on a working visit and a vacation in Sochi.
The release of Sannikau will have a dual impact on the negotiations about the format of the opposition’s participation in the parliamentary elections in September.
On the one hand, supporters of explicit boycott of the election campaign may use the release of Sannikau as a factor reinforcing their position, namely, that the authorities are fearful of the boycott and therefore have already made concessions ergo they will continue insisting on boycotting. On the other hand, supporters of participation in the elections will argue that following the release of Sannikau other political prisoners could be released before the autumn.
However, it implies that negotiations within the opposition will continue. In fact, the opposition will refuse to take a principled decision regarding “the boycott or participation” and in reality the choice will be made in favourof participation and against the boycott. On 23 January a number of opposition organizations failed to sign an agreement on the format of the election campaign, regardless of their previous statements about working on such document.
The delay of the principled and joint decision on the format of participation in the parliamentary campaign by the opposition confirms our previous assessment: the majority of the opposition will take part in the elections and will hush up the issue of explicit boycott. The meeting of the so-called “Coalition of the Six” on 23 January was not attended by four heads of the political parties and movements (2 were on business trips abroad, 2 were ill.)
The release of Sannikau, if it takes place, will provide the leadership of the opposition with yet another reason to postpone the adoption of the final decision. For instance, one of the negotiators (Deputy Chairman of the United Civil Party Mr. Lev Margolin) said on January 23 that in the following two months the coalition intended to organize a broad public debate with participation of experts regarding the format of the opposition’s involvement in the elections. He also said that the boycott would not in principle prevent the opposition from the nomination of candidates.
To date, the following (not-registered) organizations have explicitly supported the idea of the boycott: the Organizing Committee of the People’s Assembly, the “Belaruski Rukh” Movement and the Belarusian Christian Democracy. Only one party, Fair World of the “Coalition of the Six” stands for participation in the elections. The remaining organizations have not yet made up their minds and continue consultations.
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.