State expropriation of funds from business and the population continues; the price of dissent remains high
The authorities pay increased attention to private and business expenditures, planning to increase tax collection to compensate for declining budget revenues. Security forces continue to try to control online audiences, reduce the influence of independent media, and expand the number of Telegram channels classified as “extremist groups”.
Lukashenka has justified the tax on apartments by linking the proposal with the costs associated with coronavirus. Surcharges on some mushroom pickers, gardeners and beekeepers are also proposed, as is a new shoe labelling regulation which should increase budget revenues from November, at the cost of increased prices for small and medium-sized businesses.
The tax authorities found fault with a company relating to individual entrepreneurs’ contracts and opened a criminal case regarding unpaid taxes. Similarly, a resident of Chausy was found to have an “extra” 500 thousand rubles.
The solvency of enterprises is deteriorating as the authorities are gradually withdrawing support with the participation of private capital.
Pukhavichi bakery announced a default on its bonds.
Against this background, the Belarusian leadership remains economically optimistic, based on GDP growth for the first half of the year of 3.5%. Some sectors of the economy show impressive export growth, such as 145% for timber products between January and September.
The government plans to expand protectionist measures to support Belarusian producers (i.e. restrict imports), risking accelerated inflation and a decline in living standards.
The state tries to mitigate discontent with decreasing incomes but does not increase social payments and pensions. However, living standards continue to decline as inflation rises and real salaries of state employees contract, along with real pensions.
The security forces have expanded the list of “extremist” Telegram channels to approximately 300, placing close to 1 million people at risk of repression. Show trials of critics of the security forces and post-election protest demonstrators continue, culminating in harsh sentences. Dismantling of the legal framework proceeds as tension and division in society continues to grow.
The state aims to consolidate and maintain the loyalty of the state apparatus and security forces by continuing wealth transfer from businesses and the people.
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Situation in Belarus