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6.08.2014

Salaries frozen in Belarus  ? 38

14:15, — Economics
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Salaries frozen in Belarus

Experts forecast an increase in personnel outflow.

Several Belarusian companies say they have problems with paying salaries.

Some delay salaries, some do not have money to pay, Nezavisimaya Gazeta writes.

Experts think the problems were caused by the government's recent ban on increasing salaries without production growth. The situation in the labour market will be worsening, experts forecast.

Employees of the famous construction company Zabudova said yesterday they don't receive wages on time. They say they receive salaries in small portions during a month and the last wage increase was a year ago in spite of official double digit inflation. The plant administration talked to journalists and explained the delay with financial problems.

Even Sovetskaya Belorussia, a state-owned newspaper of the Lukashenka administration, reports about problems at another well-known company, the knitted clothes factory Polesie. Losses of once successful factory doubled last year and doubled again in the first six months this year. Having such problems as loans, excess inventory, absence of sales and absence of money to pay salaries, new managers opted to start with staff reduction.

Experts say the problems of the above mentioned and other companies have roots in the country's economic policy that focuses on gross output growth. They repeatedly warned the authorities that the companies that cannot sell their products should be closed, restructured, reformed. Under pressure from the president, the government ignored signals of the market and demanded the implementation of gross targets, production growth and salary increase.

The recent document of the government that forbids to raise salaries without a production increase shows that the authorities have realised the harm of their earlier policy and are ready for certain changes, according to local observers. However, experts are not sure the current authorities are able to carry out fundamental reforms. At the same time, random spontaneous measures, like the ban on raising salaries, won't be effective. The Belarusian government published the relative document on August 1. Officials hope it will allow reducing inventories and increasing companies' incomes.

Economic analysts turn attention to the fact that the ban on the increase in salaries without financial grounds was imposed too late and will have negative impacts in the current situation of open borders of the Customs Union. The media earlier reported about the brain drain and the outflow of workers. Most migrants go to work in Russia. More mobile young people leave for Europe or the US. People with Polish roots can obtain the Card of the Pole and look for a job in Poland. Experts forecast that the trend will remain popular in conditions of the salary freeze at most enterprises: those able to sell their labour at a higher price will leave the country, living standards of those who cannot do it for some reasons will be declining while prices will be growing rapidly.

Photo: bymedia.net


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