The New Serfdom in Belarus

The Belarusian government is becoming increasingly dysfunctional. It finds it more and more difficult to perform its daily tasks without resorting to administrative force.

This is the major implication of the unprecedented decree that Alexander Lukashenka signed on 7 December.

The world media have already interpreted the decree as legally introducing serfdom in Belarus. It ties workers to their workplaces. Now they can only leave their current jobs with permission from their boss. Otherwise, they will have to pay the state or be subjected to forced labour.

At the moment this affects fewer than 20,000 employees in Belarus. But many fear that the decree might well become a model across the whole economy later.

Lukashenka Is “Tired of Pleading”

For the last several weeks, Alexander Lukashenka has been particularly busy with the country’s wood processing industry. He visited two large factories in Ivatsevichi and Barysau where he wanted to assess the progress of the state modernization programme.

Since 2007, the government has provided discounted credits worth about €700m for the reconstruction and modernization of nine wood processing factories in different regions of the country. The rationale behind the programme was to boost the productivity of the industry which is based on local raw materials and can be competitive on international markets. Through these measures, the authorities sought to lower their dependence on Russian oil, the major driver of Belarus’s exports.

In spite of significant state subsidies, the Belarusian Statistics Agency did not record any progress of the industry. Some indicators even demonstrate regression. For example, the share of the wood processing industry in the overall output of all processing industries has declined. In 2007 it was 2 per cent. And in 2011 it went down to 1.5 per cent.

During his visits Lukashenka blamed the failure on the government and the factories themselves. In Ivatsevichi he fired the executive director and in Barysau he came up with more radical ideas. He said that he was “tired of pleading” with everyone and ordered the draft of a decree that would prevent employees from quitting their current jobs.

Decree in Violation of National Law and International Treaties

On 7 December Lukashenka’s order materialised in Presidential Decree No 9 “On Additional Measures for the Development of the Wood Processing Industry”.

According to the decree, employees technically become serfs of their bosses. The latter will now decide who can leave for other jobs and who must stay. If an employee disagrees he or she can appeal directly to the governor of the voblast.

The decree specifies no criteria on which governors will have to make judgments. In the Belarusian reality, this means that governors will generally support the factory management, unless there is a personal conflict between them.

Lukashenka believes that the decree will help the factories keep employees who leave in search of higher wages. Today the average salary of workers in the wood processing industry is about $250-300. The incumbent demands that workers additionally start getting monthly bonuses which will depend on their factory’s financial means.

If an employee decides to leave against his boss’s will he or she will have to pay back the whole amount of the bonuses received since 1 December 2012. And if the person has no money to pay, he will be forced to remain at his previous workplace and the amount of all his previous bonuses will be withheld from his salary.

The decree will affect all the employees of the nine wood processing factories that have been part of the government’s modernization program. They make up about 13,000 people. Additionally, it will also affect the personnel of the state construction companies that participate in this program. They amount to around 3,000-5,000 people.

Needless to say that this legal act violates national and international labour standards. It looks shocking even to Belarusians, who are already used to different kinds of forced labour. Many already fear that this model will later be applied to other sectors of the economy. Lukashenka, too, said on 10 December that "the wood processing sector should become an example for others".

Dysfunctional Government

Besides the emotional side of this story, it signals that the Belarusian authorities are becoming increasingly dysfunctional. The case of the wood processing industry clearly demonstrates that they cannot perform the task of economic modernization without violating the law and resorting to extraordinary administrative measures. The usual social and economic policies do not work any longer. The authorities have nothing else but to use force. 

However, even administrative pressure on the people can hardly solve the problem.

You cannot make your production innovative and your goods competitive by simply forcing your employees to stay with you. And even if you threaten all of them into staying, it does not automatically raise their labour productivity.

You cannot even increase employees' salaries administratively. Well, you can. But as last year's economic crisis has shown, the whole country will then need to pay a very high price for that.

Thus, administrative force cannot solve Belarusian economic problems. Even if the authorities try introducing Stalin-like mobilisation of the whole economy. We live in the era of globalisation. And administrative measures, like the ones in question, seem absolutely barbarian. People have multiple opportunities to overcome them and to make the authorities look even more dysfunctional.

Interestingly, all this is happening in the background of the melting social benefits (rising costs of utilities and goods, worsening access to healthcare and education, etc). The incumbent regime has never really been socialist. But now even the idea of the Belarusian socially-oriented market economy looks more and more like a myth. 

Falling social benefits and projected economic difficulties next year will surely bring more similar stories.

Yauheni Preiherman is Policy Director of the Discussion and Analytical Society Liberal Club in Minsk.

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