ECONOMY AND LIFE: BELARUSIAN REALITY

1. Statistical assessment of social and economic development

“The Republic of Belarus is a unitary democratic social jural state” reads the first clause of Article 1 of the Belarusian Constitution. It is obvious that of all definitions mentioned above the only one that is unconditionally observed is territorial integrity. As far as the remaining ones are concerned, we suppose that there are a lot of grounds to doubt that they are properly observed. Let us consider, for instance, how Belarusian authorities fulfil their constitutional obligations as regards our state’s “social orientation”.

We will say in a straightforward manner that all social activities of the authorities is reduced to one thing – equal distribution of the funds, which they contrive to extort from stagnating production companies or coax out of Russia, which puts on imperial airs. This is achieves by methods and tactics typical of “market socialism” – i.e. take away and distribute! The enormous burden of taxes, all sorts of dues and fees, despotism and tyranny of controlling bodies, direct expropriation of property, state-protected racketeering – if taken together, all this helps to keep up people’s living standards at a fairly low level, however it simultaneously liquidates economic stimuli, suppresses individual incentive and deprives society of prospects for economic and social development. “I am not going to lead my people in step with the civilized world!” – Perhaps, no one could define the direction of our development better than A. Lukashenko. Although it is possible to lead such a life in the time of war, for instance, or in the post-war period, but is it unbearable in the times of peace. Findings of public opinion polls, and those of the IISEPS in particular, prove the aforementioned fact very expressively. Respondents’ answers show that of all things considered vital for human existence it is social and economic problems that the population views as be most pressing and acute ones (see Table 1).

Table 1. The most acute problems the country and the population face*, %

* To make them comparable, results of different opinion polls brought to 100%

In spite of all efforts of state propaganda, it is getting more and more difficult for the authorities to conceal the absence of noticeable progress in the social-economic sphere.

Considering the fact that, on the one hand, there occurred no significant increase in the contents of the basket of goods (rather on the contrary, of which there is a documentary proof) and the dollar inflation beyond the borders of our country is minute, on the other hand, then there is nothing left for you but to admit that the increase in all these indicators has one and the same nature – i.e. the National Bank’s manipulating the exchange rate of the Belarusian currency, which subsequently resulted in the growth of prices of the most essential foodstuffs and commodities.

Thus, last year the value of salaries and pension benefits failed to ensure an actual rise in the standard of life of the overwhelming majority of Belarusian people, whereas statements made by the official mass media about progress in this area is nothing but trivial propaganda. Therefore, in the near future, when the National Bank finally achieves a uniform exchange rate and stops its manipulations, one should expect the basic social and economic indicators to stabilize on the low level, on which they really are.

Let us refer to official statistics. Thus, the average monthly salary with reference to all branches of economy has practically remained the same over the past five years (picture 1). In 2000 its value reached only an insignificant $60.2 (with reference to market exchange rate), which makes up 127.1% of the minimum consumer budget. With salaries like that a family of two employed people cannot afford having even one child. As compared with the time when A. Lukashenko came to power in 1994, the average monthly pay has gone up by 250% (from $24.4). At this rate, living standards of the year 1991, which the authorities consider their economic goal, can only be achieved in eleven years, that is by 2012.

With regard to pension benefits for labor veterans the situation is similar. By 2000 the value of the average pension benefit has reached just $24.0 per month, which makes 79.9% of the minimum subsistence budget (MSB) – the official threshold of poverty (see picture 2). In comparison with the year 1994, the average pension benefit has grown 390% (from $ 6.1). At this rate, the 1991 living standards can be achieved only in eight years’ time. Statistical data, however, show that the average value of a pension benefit was on the rise only during the first two years of Lukasheko’s rule. Afterwards the aforementioned figured steeply went down. And it was not until the year 2001 that the situation has somehow improved. Therefore, the actual time of achieving the 1991 standards may be even further in the future.

In order to reveal the aforementioned statistical indicators’ tendencies to change, let us explore their dynamics in 2000. As you can see in pictures 3 and 4, over the year there was a significant convergence of the dollar value of the average monthly salary (and average pension benefit), calculated with reference to the U.S. dollar market exchange rate. At the same time, it appears that one should be happy about the positive dynamics of correlation between the value of people’s earnings and life standards. However, it is easy to notice that these dynamics practically overlap with the increase in earnings in dollar terms, calculated with reference to the dollar’s market exchange rate. Moreover, the dollar equivalent of these living standards, when calculated against the market exchange rate (see picture 5), has also gone up fairly high.

Judging by this these facts, one may conclude that the government’s social policy is far from fully meeting the constitutional requirements and popular interests.

It is clear that people’s concern over of social-economic problems, low living standards and dissatisfaction with the social policy of the official authorities cannot but affect sentiments of the population and public mind, which is said to be determined by existence. Now let us trace down the development of our people’s views on society and economy, relying on findings of nation-wide opinion polls conducted by IISEPS.

2. The evolution of economic views of the population

Findings listed in Table 2 show that our compatriots, unlike the authorities and state-run mass media, come up with fairly pessimistic evaluations of the results, which the government’s economic policy has achieved. An overwhelming majority of them suppose that over the last year the economic situation in the country has either worsened or remained unchanged. Except that in November last year popular judgements about economic progress became slightly more positive, as compared with the previous polls. We are inclined to attribute that to the expectation of the pay rise under the government’s resolution on centralized increase in the minimum living wage and pay tariffs by 38-40% in October last year.

Table 2. Change of economic situation in Belarus over the last year*, %

* Here and below sum of answers in columns could be less than 100% because lines “Find it difficult to answer” and “No answer” are excluded

In the meantime this proposition has to a great extent failed to come up to people’s expectations, as over three thirds of interviewees did not notice any change in their financial position. The November poll revealed that only 9.0% noticed an improvement of their financial condition. It was probably these 9.0% to point out an improvement in the social and economic situation in the country. It is worth bearing in mind the fact that people who work for state-owned companies and get their pay from the state budget and whom the government promised a pay rise, constitute at least 13-14% of the grown-up population. This conclusion is proved by data provided by the Ministry of statistics and analysis, which read that October’s average monthly pay was only 15.7% higher than that of September. Now if we subtract the inflation component (5.2% in September) from this widely publicized pay rise, the population must be content with less than 10%.

Table 3. Change of personal material status over the last year, %

However, in the opinion of poll participants, October’s actual increase in incomes per capita turned out to be even lower than that. Thus, if in September an average income per capita was 38.2 thousand rubles, in October it reached just 38.9 thousand rubles. Such an increase (1.8%) is three times as low as the rate of inflation! Therefore, not only did people’s actual incomes go up, but also they even decreased. Hence, although the authorities interpret the December pay rise as “special concern for public welfare”, it was a forced measure, which is especially necessary on the eve of the presidential election campaign.

As one can see in Table 3, the overwhelming majority of people (over 90%) have not noticed any improvement in their financial position over the last few years, which is another proof of our conclusions and judgements about the results of the government’s welfare policies. It is clear that in an economic situation like that people, as usual, are ready find out who is to blame. As one can see in Table 4, poll participants put the blame for the worsening economic situation, in the first place, on the government, the president and local authorities. In other words, in the eyes of the majority of the population the main culprit of the current economic problems is the national leadership – beginning from the president and down to the lowest-ranking apparatchik. In the meantime, the number of those who adhere to such an opinion has gone up sharply over the last several years. Thus, as compared with the year 1996 when the authorities scored 44.9% of all negative evaluations, in October 2000 the negative score reached 66.6% or half as much again.

It is significant that of all evaluation components of the government, it is the President’s negative score that has been increasing at the least rate. This indicates that a certain proportion of the population is still incapable of abandoning the practice of idealizing the president they once elected. In the eye of their mind, they attribute economic difficulties to bad working discipline, negligence, bribery and embezzlement of public funds committed by state officials appointed by the president: “Ours is a good president, but there are people who hinder his activities…” However, when it comes to answering the question “who interferes with the president in a country where no state official will do a hand’s turn without instructions from above”, these people have nothing to say, as a rule.

Table 4. Responsibility for deterioration of economic situation in the country*, %

* To make them comparable, results of different opinion polls brought to 100% %

Table 5. Positive answers top the question about measures, which would have contributed to improvement of economic situation in Belarus, %

Table 4 also illustrates that the number of replies blaming other people or subjects for economic problems is constantly reducing. In particular, less accusations is made against businessmen, the West, the mass media and Russia. Even the notorious Mafia, which no one has seen, but whose intrigues are known to everyone, is now less guilty of our economic troubles than it was four years ago.

Table 6. Choice of economy type*, %

* In questionnaires for 1994-1996 respondents were not offered types of market economy

While the population is still unsophisticated in defining the blame of certain state agencies for lapses in the economic policy, then when it comes to knowing why these lapses occur, our respondents have a much better understanding. This is indicated in Table 5. As one can see on this table, by way of measures to pull our country out of an economic deadlock, the majority of respondents would prefer something absolutely contrary to what A. Lukashenko and his team are trying to implement. In other words, the majority of the population do not share the concept of “market socialism”, which the authorities have imposed on the country. Over the past few years opinion polls have been regularly indicating that the majority of people fairly adequately see the main reason of our economic problems, which the country is unsuccessfully trying to overcome. This becomes particularly evident against the background of achievements of the neighboring states. As a result, our citizens, whether they fully realize it or not, are more inclined to adhere to market economy and are less willing to build any sort of socialism. Interviewees’ replies to practically all questions, which indicate their attitude to market economy, confirm the above-mentioned conclusion.

For instance, Table 6 shows that despite the “market socialism” orientation, almost three quarters of respondents prefer a trivial market economy for some reason. The rows of admirers of planned economy are getting thinner and now not all pensioners stick to this idea.

Among supporters of market economy there still exists a noticeable disproportion to the advantage of those who much prefer a liberal variant of such economic system. One can attribute this to people’s reaction to the negative consequences of the government’s interference with economy. For instance, it is for seven years already that the authorities have been trying to conquer inflation by means of state-imposed price management. The cabinet and the government have been reshuffled more then once, over and over again has the national television of Belarus been showing conferences conducted by A. Lukashenko, where state officials were publicly accused of incompetence and of a failure to follow the president’s instructions aimed at improving people’s welfare standards. Inflation, however, has always been cheeky enough to exceed the declared maximum threshold and keeps devouring nominal pay rises, thus reducing laymen’s electoral support.

Table 7. Dynamics of answers to the question: “Shall the state regulate prices for goods and services?”, %

As you can see from Table 7, people have come to realize that regulating prices does more harm than good, for it helps neither to stop inflation, nor fill up the stock of goods in shops.

Other replies of poll participants also confirm the preference of market economy. Thus, Table 8 reveals that the majority of people polled consider private property to be more effective: it is for three years already that the proportion of people who think so has been higher than the number of those who have either failed to realize that or refuse to face up to the fact.

Table 8. The most efficient form of ownership, %

Table 9. Type of company preferred most of all (to work for it), %

Quite the same follows from Table 9, which indicates the self-same growing number of people, who prefer to work for private companies. Over the last three years this proportion has grown by almost two thirds and this is in spite of the fact that the government’s economic policy hinders normal market relations and stifles private business. Judging by these data, literally in the nearest future the number of people who would like to work for private companies will exceed the quantity of those who prefer to be employees at state-run companies.

As far as answers to other indicator-questions are concerned, the results need no additional comments as they are so obvious and self-explanatory that they speak for themselves (see Tables 10-15). All these Tables indicate a similar tendency – a gradual increase in people’s appreciation of and orientation to market economy.

Table 10. Dynamics of answers to the question: “Shall the state limit people’s incomes?”, %

Table 11. Dynamics of answers to the question: “What would you choose?”, %

Table 12. Dynamics of answers to the question: “What do you think: to purchase goods at a lower price, and then sell them at a higher price – is this fair earnings?”, %

* Here answers “yes” and “no” include “rather yes, than no” and “rather no, than yes,” respectively

Table 13. Dynamics of answers to the question: “Would you like your children run private business, to cast in their lot with private enterprise?”, %

Table 14. Dynamics of answers to the question: “What do you feel towards fellow countrymen with high incomes?”, %

Table 15. Dynamics of answers to the question: “What would you prefer?”, %

Thus, the results of our analysis enable us to unambiguously conclude that Belarusian people’s economic views and preferences are gradually progressing towards appreciating and supporting normal market economy. It is for this very reason that all market-combating efforts of the authorities produce a completely opposite effect: the more strongly the authorities stifle individual incentive, the more actively they try to interfere with economy, the fewer are the number of people who support them.

In the meantime, it is worth mentioning that the population has a fairly clear idea of what A. Lukashenko’s economic orientation really is. Thus, replying to the question whether he adheres to market economy, only 16.1% of respondents answered in the affirmative, while 36.9% believe he supports the idea of planned economy. Just 4.8% of those polled suppose A. Lukashenko is an advocate of capitalism and 34.4% believe him to be an apologist for centralized planned economy.

It is clear that people’s increasing pro-market preferences will sooner or later leave no chance either for “market socialism”, nor for those who preach it. The proof of that is findings listed in Table 16. One you can see, only every fifth respondent was satisfied with how A. Lukashenko ruled the country over the last 6 years, while every third one feels rather dissatisfied. Meanwhile, the percentage of the dissatisfied is constantly increasing, while the amount of the satisfied respondents is waning. Therefore, it does not come as a surprise that those who do not want A. Lukashenko to be their president for another term (41.5%) exceed by 15% the quantity of people who wish him to continue his rule (36.1%).

Table 16. Dynamics of distribution of answers to the question: “Are you satisfied with A. Lukashenko’s six-year rule?”, %

The aforementioned facts enable us to arrive at the following conclusions. Firstly, sociological surveys reveal that the population considers social-economic problems to be the most pressing ones. It is getting more and more difficult for the government to conceal the absence of progress in this sphere. At the same time our analysis shows that people’s living standards neither visibly improve nor go worse, as a considerable proportion of the population have incomes unaccounted by the official statistics.

Secondly, the majority of the population believes that the economic situation in the country and their financial position have gone worse over the last year. And it is the government that they put the blame on.

Thirdly, people prefer something absolutely contrary to what the government is trying to implement in order to pull the country out of an economic deadlock. The majority prefers a trivial market economy believing that private property to be more effective.

Constantly on the rise is the number of persons who wish to work for private companies, who are opposed to price regulations, who prefers a high, but not guaranteed salary, and who do not consider resale a crime.

Fourthly, the population believes that A. Lukashenko is an adherent of centralized economy and socialism. Therefore, increasing pro-market preferences of the population are going to result in a confrontation of the government with the electorate. Already now, while every fifth respondent is satisfied with how A. Lukashenko ruled the country over the last 6 years, every third one feels rather dissatisfied and the percentage of the dissatisfied is constantly increasing. The percentage of those who do not want A. Lukashenko’s presidential rule to last another term is predominant. The main reason why people are dissatisfied with the authorities is the absence of prospects for normal social-economic development and, therefore, improved living standards.