Economist Blasts Lukashenka’s ‘Personnel’ Idea

The dictator's initiative is doomed to failure.

Lukashenka proposed returning to Soviet practice in order to provide enterprises with workers — building housing where there is a shortage of personnel. Why this initiative is doomed to failure was explained to Zerkalo by Dzmitry Kruk, a senior researcher at BEROC.

Economist Dmitry Kruk believes that it will not be possible to solve the problem of personnel shortages with this approach. The maximum that officials can hope for is to transfer the shortage of personnel from some enterprises (localities or entire industries) to others or from the private to the public sector. “But this will not solve the problem itself, because in this case the shortage of personnel will be more acute in the region or industry from which the flow of people occurred. Moreover, on the scale of the entire economy, the number of labor resources will not change,” explains the analyst.

Firstly, this idea could have been applied if the demographic situation was good, allowing young people entering the labor market to be encouraged to move, notes Dmitry Kruk. But things are pretty bad in Belarus: the population is rapidly declining. At the same time, the share of labor resources (that is, the number of people who can potentially work, relative to the total population) decreases.

“Plus, in addition to all this demographic “happiness”, over the past three years, according to minimal estimates, about 300 thousand people have moved to other countries (there is no exact official data, and expert estimates vary). This further aggravates the situation,” the economist emphasizes. “Consequently, it is also not necessary to say that there is a potentially free group of people who could be directed somewhere in this way.

Perhaps officials want to rely on the labor migration of the rural population when they say that they will build housing where there is a shortage of personnel. A similar practice was widely used in the USSR (for Belarus these were the 1960s–1980s), when flows of people came from villages to cities. During the same period, technologies in agriculture were actively developing, which made it possible to free up part of the labor force in rural areas, and some people left en masse to work in industrial production. Now in Belarus the share of the urban population exceeds 78%. This means that the potential of this tool has already been exhausted. This is the second reason why Lukashenka’s idea may fail.

The third argument, according to the analyst, why Lukashenka’s idea may fail is the growth of such an indicator as housing provision. According to official statistics, it has accelerated significantly. The construction of housing for those in need from the mid-2000s to 2014 led to a decline in the number of such people.”