Belarus At War With Its "Social Parasites"

On 2 April, Alexander Lukashenka signed a decree against “social parasites”. From now on, individuals who do not pay taxes will lose be forced to submit around $240 annually into the the state’s coffers.

This law is designed to help stimulate employment and fill any number of budget gaps, but it should be viewed in terms of how it reflects the natin's rising unemployment rate and inability to collect taxes.

Despite its good intentions, it is almost certain to harm many individuals who are in real need of assistance. According to the IPM Research Centre, in the near future the unemployment rate in Belarus will rise to a historic high of 8-9%. Moreover, many Belarusians are presently working either part-time or have been laid off as the economy struggles to recover.

The rising level of unemployment has only extended the gap between the authorities and society. Lukashenka’s approval rating has dropped by more than 10% over the last six months. The latest round of ill-conceived legislation clearly demonstrates that the authorities are helpless when it comes to adverting further economic decline.

The Belarusian Fairy Tale of Full Employment

The pre-election campaign programme of Alexandr Lukashenka in 2010 claimed that by 2015 “everyone will be guaranteed a job”. According to official statistics, the Belarusian authorities have gotten pretty close to reaching their prescribed goal over the past couple of years. As of 1 March, for example, only 0.8% of Belarusians are officially registered as being unemployed.

This figure does not reflect reality. The majority of Belarusians do not apply for social welfare assistance and do not officially register as unemployed for a number of reasons.

unemployment benefits in Belarus amount to roughly $8 a month 

First of all, unemployment benefits continue to be miniscule and amount to roughly $8 a month. Second of all, to obtain this financial support, the average Belarusian must perform poorly paid public monthly work like street cleaning. Both of these issues make it pretty clear why only a small percentage of Belarusians have registered themselves as being unemployed with the officials.

Despite unreliability of the state's data, the unemployment rate in Belarus is much lower than in neighbouring countries. A low unemployment rate has allowed the Belarusian economic model to remain attractive for many Belarusians, many of whom have been reluctant struggle through economic liberalisation, a path that has dominated the policy agendas of all of its neighbours to some degree.

Unemployment in Belarus and its neighbours in 2013 (%)

Country Russia Belarus Ukraine Poland Latvia Lithuania
Unemployment rate 5.6 5.8 7.9 10.4 11.1 11.8

Data: World Bank

A high employment rate largely explains why Alexandr Lukashenka has quickly become a popular president, not only among Belarusians, but also in neighbouring countries. As of late, however, a rapid transformation is under way - a chance that challenges this dominant paradigm.

Belarus Prepares for High Levels of Unemployment

Unemployment in Belarus is very likely to reach historic levels in the near future. A recently published study by the IPM Research Centre, for example, shows that an unemployment rate of 8-9% may be just around the corner.

Even official statistics have shown a growing level of unemployment - from February to March it officially increased 0.1%. The number of labourers has steadily declined in Belarus even in traditionally strong sectors like construction and trade.

Unemployment is only the tip of the iceberg. Many businesses have closed their doors and are sending their employees home. Near the end of March the Minsk Automobile Plant shut down its main conveyor belt. Some enterprises, like the Minsk Tractor Plant for instance, literally have no place to store their finished products. Many enterprises are currently working only two or three days a week as a result of the ongoing economic slump.

Since the disparity between Belarusian and Russian salaries has decreased, Belarusians have fewer incentives to go to work in the east

Businesses have huge debts that they owe banks and, by all appearances, are unable to satisfy them in the current economic climate. Many of them are unable to pay their employees' salaries at present, like the Homel Agricultural Plant. Data from the Independent Institute of Socio-Economic and Political Studies shows that more than two thirds of Belarusians believe that the Belarusian economy is in a state of crisis.

The economic decline of Russia has made Belarus' problems even more acute. Since the disparity between Belarusian and Russian salaries has decreased, Belarusians have fewer incentives to go to work in the east. Many Belarusians will stay at home and look for a job, even though the number of positions has declined. One collective farm director told Belarus Digest that refugees from Ukraine have created additional pressure on the market and lowered local salaries due to competition.

A Decree on “Social Parasites”: A Goofy Means of Meeting Budget Demands

The Belarusian authorities are trying to encourage Belarusians to take up any job they can find. A recent law, more popularly known locally as a decree on "social parasites", forces Belarusians to pay a tax for being unemployed. This law is unique to Belarus and many individuals question how it will be enforced given the current climate.

Belarus has problems with collecting taxes and largely appears to be unable to punish tax evaders in the usual way, so it has been forced to create push out nontraditional measures. According to Alexander Chubryk, Director of the IPM Research Center, the presidential decree on the issue largely avoids the main issues and will help tax evaders profit and develop into the next generation of "social parasites" all while avoiding paying usual taxes, which are much higher.

The law will, however, punish people who really need help during the economic crisis. People, who really cannot find a job and make ends meet will receive adequate financial support from the state.

Unemployment is Already Changing Belarus

Alexandr Lukashenka is paying for the economy's ongoing decline. According to the Independent Institute of Socio-Economic and Political Studies, in September 2014 his electoral rating was sitting at 45.2%, and in March 2015 only 34.2% of Belarusians were behind him. If not for the war in Ukraine, Lukashenka’s rating would likely be even lower than this.

As the Belarusian economy will continue to be in crisis for at least another two years, Lukashenka’s ratings may yet reach new historic lows. Although mass demonstrations are unlikely at the moment, the situation will open a larger window of opportunity for other forces inside and outside of Belarus.

Ryhor Astapenia is a Development Director at the Ostrogorski Centre, and editor-in-chief of Belarusian internet magazine Idea.

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