An expert of the Eurasian Economic Community (EurAsEC)’s Anti-crisis Fund has warned the Belarusian government against raising average wages in the country.
“If the government is about to raise average wages to $500 this year this will top the most optimistic productivity growth estimates. This plan implementation will lead to balooning imbalances in the economy, which the government program being supported by the anti-crisis fund is trying to do away with, ” Alisher Mirzoyev, chief of the social and economic policy department of the EurAsEC Anti-crisis Fund, told journalists on May 14, 2012.
According to Alisher Mirzoyev, there have been signs of stabilization in Belarus’ economy in recent months . “It is crucial that the fundamental principles of stable performance of economy should be followed. Real wages increase, i.e. adjusted for inflation, should not exceed productivity growth, ” he stressed.
Breaking this rule leads to widening of the spiral of inflation, Mirzoev added. “That is what happened in 2010 when wages increase exceeded productivity growth threefold (33% and 10%, respectively). This was one of the factors that caused the foreign-exchange crisis in the spring of 2011,” Mirzoyev summed up.
In June, 2011 the Council of the EurAsEC anti-crisis fund sanctioned $ 3 bn loan for supporting the stabilization program of the Belarusian government. Two tranches ($800 mln and $440 mln) came, but the EurAsEc withheld another installment of the loan. According to the plan enacted, it was to be disbursed by February 28, 2012. But its disbursement is still under negotiation.