The state structures relations with local authorities and business

After the local election campaign, President Lukashenka has resumed staff rotations in local authorities. While the privileged business enjoys the special protection of the state, the remaining business hardly feels any improvements in the business environment. The president’s eldest son, Viktor Lukashenka became a member of the council for the digital economy and the Communications Ministry – the crypto-market authority.

Last week, the president resumed staff rotations at the local level; he appointed 11 heads of districts and several senior regional officials. In 2017, he replaced about 30 heads of districts (about a quarter of their total number) through transfers from one region to another. He suspended rotations for the duration of the local election campaign. Rotations mainly affected those heads of districts, where protests against the decree on social dependants took place.

Last week’s appointments followed a similar logic. For instance, an agrarian from the Grodno region was appointed to head the Minsk region, and heads of districts were primarily transferred from leading positions in other regions. Such personnel policy, in the president’s view, aims to prevent corruption and, most importantly, to keep the nomenclature from feeling competent and confident, rather than dependant on the president’s “grace”. Local authorities have been tasked to ensure employment and retain/improve average pay levels.

The newly formed Council for the Digital Economy is comprised of IT business representatives and High Technology Park leadership, as well as public officials, including Prime Minister Kobyakov, his Deputy Matyushevsky, Presidential Aide for National Security Viktor Lukashenka and Operational and Analytical Centre Head Pavlyuchenko. The Council would be in charge of implementing the state IT policy and supervising the IT business.

The central government builds relations with business basing on privileges in exchange for investments, taxes, and support for the state social policy amid a constant threat from the power block for disobedience. In the regions, such approach is difficult to reproduce, since local authorities do not have sufficient powers to grant such privileges which could justify the risk and costs. Therefore, as labour flows from the state economy to the private sector, stratification between the capital and the regions would increase.