No More Money For Salaries

Drop in income of the Belarusians is confirmed even by an official statistics.

In January-August 2016 real disposable income of Belarusians, according to data of the National Statistical Committee, declined by 7.1% compared to the same period last year. This is the greatest drop over the past 20 months.

In an interview with "EuroBelarus" expert on public service reform and head Kosht Urada" project within the project BIPART Uladzimir Kavalkin says that "in the next year and a half, the drop will maintain, fluctuation of income will be about zero."

- It is likely that there will be other slight drop in income, but it will not be drastic. It will be similar to changes in the Belarusian GDP - within a few percent.

- Does it mean that return to $500 salary is not expected in the near future?

- I think that even $500 salary, to say nothing of $1000 promised, has not been provided by our economy. This level of revenue was initiated by equity lending, direct and directed lending. Can we recall the reason foreign loans have been taken for? They were spent on so-called modernization of the national economy. But it could not result into anything positive because the competitiveness of goods did not improve, purchase of equipment was mostly ineffective - it was left idle on warehouses for a while. Modernization of the woodworking industry is a demonstrative example. It seems that both the president and the government prefer to forget this epic failure and decided not to discuss it anymore.

- In addition to woodworking industry there were dozens of programs of modernization, revival and so on. Did it not make any sense?

- It is easy to trace more or less successful campaigns in Belarus. If in the beginning the government tells a lot about future results, and in the end only silence screams - it means that the campaign failed. If the issue is kept afloat, then bureaucrats try to "sell" it to the ruler and the people. Here is one example of successful campaign: Valery Tsepkala is still proud of the High-Tech Park, of its ability to attract investments, and so on.

However, it is an offshore programming area, but, nevertheless, there are indicators that can demonstrated as a relative success. And what about modernization programs? There is none, because it raises questions about money and no effectiveness of the modernized industry. It is a great and simple way to measure success and failure of any government initiative.

- What should Belarusians hope for? Should they take the drop in income like an inevitable thing which can last for long?

- Income growth primarily was associated with throw of unsecured money into the economy. When this opportunity ran dry plus the economic crisis started in Russia - the main our consumer - Belarusian salaries came up to their real level. If you take a look at the dynamics of the Belarusian economy, it is getting more or less efficient and competitive on the global markets, where an average salary in Belarus is in the range of 320-350 dollars. Now it is a little higher, so we can say that a further drop in real income is possible, but it will be insignificant. We are close to the equilibrium state.

If the government continue to adhere to the policy of macroeconomic equilibrium, the economic growth is possible in the long term perspective. But a number of reforms is required. There is no hope that salaries will increase in the next two-three years. In the long run it all depends on steps, reforms the government will take. Today the Council of Ministers does not carry out reforms yet, trying to please the president without turning to the shock therapy, and to promote changes in the economy. Whether this campaign be a success is questionable.