The Belarusian authorities risk finally finishing off business
In the economy of the whole world, that same “rainy day” has arrived, for which it is usually customary to put aside savings in order to somehow survive when it comes. And it’s not just about oil prices and fluctuating exchange rates. The borders are closed, and in many countries the economy has simply come to a standstill.
In this situation, many governments are forced to take extraordinary measures and spend unprecedented amounts. The United States has already allocated more than 2,6 trillion dollars, Germany – more than 1,4 trillion (and this is 37 percent of the country’s GDP). Russia's anti-crisis package is still relatively small, but it also provides for business support and payments to vulnerable segments of the population, and some regions are introducing their own social programs. After the decision to extend non-working days for the whole of April, this anti-crisis package will undoubtedly be increased.
Against this background, Belarus looks like a black sheep, where serious quarantine measures have not yet been taken, and there is no talk of any self-isolation. Recently, the Belarusian government finally adopted an amendment to the budget for 2020, allocating 2,35 million Belarusian rubles to fight the coronavirus. At current exchange rates, this is approximately $900 thousand. Some measures to support business are being discussed, such as deferring payments for real estate rent, but they have not yet been adopted. But there is no shortage of actions by the authorities who are simply trying to kill business in an already difficult time.
The first sign was Lukashenko’s strict ban on the dismissal of workers during the crisis by any enterprise, regardless of the form of ownership. It was not formalized into any kind of regulatory act, but the threats sounded quite impressive. Such a ban can still be understood from a moral point of view, but the social protection of citizens who find themselves in a difficult life situation is, first of all, a matter of the state.
The Belarusian state has actually withdrawn from it. The degree of self-withdrawal is also emphasized by Belarusian unemployment benefits. Now an officially registered unemployed person in Belarus can count on assistance from the state in the amount of 18,9 to 54 Belarusian rubles. In Russian terms, this ranges from approximately 630 to 1800. It is not surprising that the overwhelming majority, having lost their jobs, simply prefer not to get involved with the state and rely on themselves.
Residents of the republic learned about another blow to business yesterday. Maybe this would have been a good April Fool’s joke, but this was a real Government Decree No. 184 of March 30 “On temporary measures to stabilize the situation in the consumer market.” The main such measure was... freezing prices. Until August 31, all businesses were required to increase prices and tariffs by no more than 0,5 percent per month.
This provision applied not only to the public sector, but to everyone in general, including individual entrepreneurs. There is, however, one loophole - increasing prices above the established limit is allowed only in agreement with the Commission on State Regulation of Pricing under the Council of Ministers.
Let’s say that it will be easy for a state industrial giant, such as the Gorizont TV factory, which works mainly on imported components, to come to an agreement with this commission. But for small and medium-sized private businesses everything will be much more complicated, and for some private entrepreneur living from a point in the market it will be completely unrealistic. And such a model provides simply boundless space for corruption.
The measure, of course, is populist. So to speak, caring for ordinary citizens. But many businesses simply cannot stand this. The fact is that the Belarusian ruble has been greatly devalued. If at the beginning of the year the dollar was worth 2,10 rubles, now it is 2,60. And the bulk of this growth has occurred in recent weeks. Not to say that prices have risen so dramatically. On average, no more than 10 percent. Imports are a little more, local goods are a little less, some, for example, taxi drivers, even cut their tariffs. Belarusians are accustomed to inflation, and they generally treat price increases in times of crisis with understanding.
Will such a measure help the consumer market? Of course no. The result can only be mass bankruptcies, layoffs and commodity shortages. Lukashenko already had to deal with the latter at the beginning of his reign, when attempts to curb price increases led to the disappearance of products and clumsy attempts to sort everything out manually.
Belarusians have not been able to forget Alexander Grigorievich’s phrase “as soon as I grabbed my balls, the milk disappeared” for more than 20 years. What will be missing this time?
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