Lukashenko tightens liability link between public officials and economic development

Ahead of the 2015 presidential campaign, Lukashenko attempts to expand collective responsibility for the economic affairs by delegating more authority to regional leaders. He envisages improving efficiency in agriculture by mobilizing public officials, as he has limited opportunities to do so with subsidies. Meanwhile, stricter labour discipline may have only a short-term effect on the command economy’s efficiency.

At a meeting on agricultural policy, President Lukashenko announced he was ready to sign a decree to strengthen powers of Belarus’ regional heads.

Yet in April, in his annual address to the Belarusian people and the Parliament, Lukashenko underscored the need to expand the regional heads’ powers in personnel matters. Despite frequent visits to Belarus’ regions since early 2014, President Lukashenko alone could not improve the economy’s efficiency. Traditional threats to public officials of criminal prosecution, constant staff reshuffles and the anti-corruption campaign have little or no effect amid languishing resources to support Belarus’ economy.

For example, recently significant resources have been spent on upgrading Belarus’ dairy industry, including building new dairy facilities and renovating old farms. . However, over the past three years, none of the regions was able to fulfil the indicators set in the national program for the diary industry development. In 2013, milk shortage was 2 million tons, and agricultural enterprises’ lost profits were over BYR 6 trillion. In Q1 2014, the number of unprofitable agricultural enterprises tripled.

Interestingly, after his controversial visit to ‘Ivatsevichdrev’ in November 2012, President Lukashenko issued a decree banning woodworking employees from resigning until the modernisation was completed. Tighter labour discipline has not improved the process of modernising the woodworking industry. Despite managers’ and senior officials’ dismissals, investment project deadlines have been repeatedly postponed and new production lines have not been commissioned to date. Meanwhile, managers believe that tighter discipline at the enterprises has a positive effect on the staffing situation, primarily on employee retention. Moreover, harsher working conditions have had no visible effect on the protest activity in the regions.

This approach to labour discipline will be extended to agricultural workers. In particular, President Lukashenko said, “I ask a tough question because the decree, which I have mentioned earlier, is on the table. Frankly, the decree is about ‘serfdom’. We lock everything on governors. You can’t leave, you can’t switch [jobs]…”

In addition, the president reinforces government control of the economy, in an attempt to reduce risks ahead of the 2015 presidential campaign. According to Lukashenko, regional heads will be empowered to relocate, appoint or dismiss managers and/or specialists at all Belarusian enterprises, including private. In addition, they will also receive the authority over regional power structures.

The authorities are not pondering reforms to the current economic model in the near future. The government will only tighten labour discipline in troubled industries.