Belarusian public budget for 2006 has been passed in a usual, uneventful way, without any open debate of lobby groups, without listening to business people and without taking into account a more acute competition between taxation and administration authorities. The government again pretends that it will cut taxes and simply its tax administration. Private businesses and state companies again have to accept the task of carrying the biggest weight of fiscal burden.

The level of poverty in Belarus fell from 39 percent of the country's population in 1996 to 27 percent in 2002 and 18 percent in 2004. About two million people have moved out of poverty. These findings come from the recently published World Bank report for 2005, "Growth, Poverty and Inequality in Eastern Europe and the Former Soviet Union."

Many post-socialist countries have completed their planned-to-market economy transition. Poland, Hungary or Estonia can be already compared with Greece, Italy or Cyprus. Russia, Ukraine and Moldova can be in transition for rather long, since they are not yet completely sure where they want to go. Belarus, Uzbekistan and Tajikistan are following their unique ways, although not in the direction of a market economy. These conclusions follow from a recent annual report by the European Bank for Reconstruction and Development (EBRD), Transition Report 2005. Business in Transition.

UN reports predict that Belarus' population may shrink to 9.4 million by 2015 and to 7 million by 2050. "Brains" are leaving for where they are really appreciated. Young people prefer to start their careers where they are paid more. Human capacity as one of key components in national economy is being destroyed now.

Belarus will keep its progressive income tax in 2006. This decision follows from the House of Representatives' recent amendments to the Belarusian income tax legislation. Five tax rates, from 9 to 13 percent, are a senseless and harmful system. It is senseless because an effective individual income tax rate has been varying just between 9.1 and 9.5 percent in Belarus in the recent years. It is harmful because the government's pursuit of the so-called social justice makes tax administration very expensive and sends many incomes into the shadow.

Prices for apartments in Belarus have doubled just within a few years. On the one hand, rising housing prices are not something special only for Belarus. The country follows European trends in this respect. On the other hand, the government is working to the effect of raising the prices even further, instead of trying to bring them down. However, the business cycle laws are inexorable. Belarus is already at the peak of housing prices. Any downward changes can become an unpleasant surprise for banks, construction companies and depositors.

 

One of the most remarkable pieces of presidential legislation this year entered into force on November 13. It is an edict, #520, on "improving legal regulations for selected economic relations," which Alyaksandr Lukashenka signed ten days earlier. The document is designed to develop and specify provisions of Presidential Edict #418, dated October 17, 2005, "On Improving the Procedure of Exempting Business Entities from Economic Accountability."

Statistical data for three quarters already allow economists to make a preliminary assessment of the Belarusian economy's performance in 2005. It is now on the peak of its activity within the chosen model of development. To keep this model running, no special skills are needed. A switchover to a qualitatively new level can prove to be much more problematic.

Transparency International published its new report in October to show the spread of corruption in the world. This year Belarus ranks 107th among 159 nations with Corruption Perception Index at 2.6, according to the report of the anti-corruption watchdog. The country fell 33 places within a year. It is equal now with Eritrea, Honduras, Kazakhstan, Nicaragua, Palestine, Ukraine, Vietnam, Zambia and Zimbabwe. Ukraine and Kazakhstan are noted as improving their reputation, while Belarus seems to be losing its reputation as a decent, law-abiding and honest country.
 

It has been two months since the UNDP presented its new country report, Belarus: Addressing Imbalances in the Economy and Society. National Human Development Report for 2004 - 2005. While speaking at a presentation ceremony on August 31, Deputy Minister of Economy Tatsyana Starchanka pointed out that the purpose of such reports was to involve a large scientific and public audience into debate for the sake of streamlining the country's socioeconomic policies. Alas, debate still gives its place to monologues by one and the same person at meetings dealing with economic policy.