The Power's Hand Reaches out to the Printing Press

The National Bank can not resist Lukashenka's populism.

Lukashenka's words about "high wages of citizens" turned out to be a bluff. The Statistical Committee of Belarus reported on wages of citizens in the first half of the year. It still lags behind the level previously designated by the ruler. Experts fear that Aliaksandr Lukashenka will require again to "switch on" the printing press, Nezavisimaya Gazeta writes.

Real incomes of the population of Belarus have not changed the trend yet - they have been falling for about two years, and in the first half of this year were 1.2% lower than the previous one.

At the end of last year Lukashenka instructed the government to bring the average salary in the country to 500 dollars in equivalent by the end of the year, or, as officials concerned about de-dollarization later fixed the task up, up to 1.000 Belarusian rubles. Against the backdrop of the recession and the crisis of the past year both experts and officials themselves took the command of the ruler as a good wish. However, a couple of months later Lukashenka repeated several times that all officials who considered such a level of salary impossible could seek another job. This led to the fact that everyone wrote the "right" target in plans, and experts joined in the discussion whether the government launched the printing press to fulfill the president's instruction. No expert can call conditions for real achievement of the level (salary growth of about 35% against the background of almost zero growth of the economy).

Officials practiced in polite literature, so as not to argue with the dictator, and not to specify anything. "It is possible to provide such a level of average monthly wages in the real sector by increase of the overall efficiency of management, reduction in inventories in warehouses, optimization of functions and the number of employees while ensuring high growth rates of labor productivity," First Deputy Prime Minister Vasil Matsyusheuski gave a lecture to the deputies. Budget officers can raise their salaries by firing off superfluous employees and by saving, he concluded. However, it's been six months already and no fundamental changes in trends have been observed so far - there is growth, but it is very far from the task set by the president.

It is gratifying that the government and the National Bank still hold their line and do not take the issue of money to satisfy the dictator's populist ambitions, local economists say. Thanks to this the country manages to keep inflation at a low level low for Belarus - about 7% on an annualised basis. At the same time, there is no certainty that Lukashenka will not make officials to do it under the threat of dismissal.

Officials try to touch on this delicate subject as little as possible, however, as their fragmentary comments indicate, they intend to rely on the fact that growth is already there - more than 9% against last year, and will also try to differentiate the approach. Officials says: "Yes, many industries and regions follow the president's instructions, but, probably, there will also be those who cannot do it."

Representatives of the IT sphere have become the most highly paid employees. In June their average salary was 3.5 times higher than the level indicated by Lukashenka. At the same time, it was 8 times higher than the salary of the poorest workers - representatives of the social sphere. On average, they receive about $230 a month.

Experts still consider Lukashenka's task an utopia, as, indeed, the very idea of "the economy growth," as officials like to say. On Monday the Research Center for Privatization and Management released a macroeconomic forecast for this and future years. It turned out that the economic recovery is not only slow, the maximum growth is 1.4%, but it remains very unstable because it depends on external factors, the authors of the document state. In particular, on agreements with Russia on energy issues and the state of the economy of the neighbor country and the main trading partner. Experts consider the scenario of rapid acceleration of the Belarusian economy an utopia, since there are no grounds for this. Fulfillment of the task for growth at any cost including a printing press switch-on will bring down already fragile financial stability; experts recall and hope that the government and the National Bank will withstand the populism of Lukashenka.