Administrative reform will increase official’s dependence

On April 12^th, the President signed a decree No 168 „Measures to optimize government system and other public organizations, as well as staffing”.

Administrative reform is carried out in compliance with the previously announced radical plan to reduce public servants by one-fourth. At the same time, the President is forced to make new appointments to reduce the opposition risks by the nomenclature, whose interests would be negatively affected by the reform.

As anticipated, the government is reforming the state apparatus in a radical way. On average it is planned to lay-off about 25% of civil servants (about 13,000 people). In practical implications, about 15% will be laid off from state-owned concerns, forest managements, and light industry, and over 27% from foodstuffs and petroleum industries. At the local level – regions, districts and towns – it is anticipated that the overall public servants will be downsized to 20.5 thousand employees – in executive and administrative bodies, including government officials.

The Decree provides the Republican Labour Arbitration (a mediatory body to resolve collective labour disputes) will be dissolved. RLA employs 27 persons and considers about 50 labor disputes per year. Civil servants and state employees, laid-off as a result of the reform, retain the right to appeal against their dismissal to a higher government agency or court, however, collective complaints procedure has not yet been determined.

Predictably, top management at ministries and local executive agencies are the least affected by the reform. In addition, several ministries’ powers even were extended, for example, with capacity to organize exhibitions and trade fairs in Belarus and abroad (Trade Ministry and Foreign Ministry respectively). The Economy Ministry has been appointed a national focal point for relations between Belarus and the Eurasian Economic Commission.

The bulk of personnel reform should be completed before July 1^st, 2013, but the decree suggests a further review of the structure and the number of state-budget funded organizations. In particular, paragraph 16.3 of the decree envisages optimizing the number of public institutions providing educational, medical and social services by 25% by January 1^st, 2014. These institutions are the pillars of the Belarus’ social state.

To compensate for the dismissal, the government offers the laid-off to defer payments for housing construction and education loans up to a year, until they find a new job, as well as to maintain access to health care in special public clinics. Those who will keep their places will be offered pay-rises from the released funds. In total, the reform aims at saving circa USD 130 million in equivalent.

Painful and rather drastic reduction in the state apparatus forces President Lukashenko to tighten discipline and minimize nomenclature opposition risks. On April 12^th, the President made a number of appointments in the law enforcement agencies’ top management, in particular, he appointed two new KGB Deputies, tasking them to strengthen the fight against corruption.

It is anticipated that due to personnel reform and associated risks, the governance style in 2013 will be rigid. Both, the President and his inner circle are interested in – for their own safety – tightened discipline within the state apparatus. This policy further limits the opportunities for the low-level officials to participate in privatization, to lobby Russian businesses’ interests, as well as to participate in Belarus – EU cross-border cooperation programmes, experts’ exchange, etc if launched.