While speaking at the 3rd All-Belarusian People's Assembly, Alyaksandr Lukashenka spoke about the need for creating stable rules for business. He again reiterated his call for de-bureaucratizing. It was first put forward more than one year ago but no significant successes have been achieved yet. The country's performance in 2005 show that the burden of administrative regulations in the economy is getting only heavier and government agencies is continuing to produce huge amounts of regulatory documents.
The legislative "harvest" in 2005 is as follows: 1,588 resolutions of the Council of Ministers, 657 presidential edicts, 19 presidential decrees, 82 laws adopted by the House of Representatives and more than 7,000 bylaw acts taken by ministries and local authorities.
The cabinet adopted an average of 4.4 resolutions per day, and the president signed 1.9 edicts and decrees per day (and this is not counting his numerous instructions, which are also considered regulatory documents). A similar pace of legislation making was observed in the past three years. The total amount of Belarusian legislation exceeds 100,000 pages.
No doubt, Belarusian bureaucracy cannot be reproached for doing nothing. Its work is in full swing. Tons of papers are circulating from ministry to ministry. Feeling nostalgic for Soviet-style general control and distribution and without European-style economy and law, Belarus has produced a dangerous hybrid of Soviet-European bureaucracy.
Belarusian legislators inherited from the Soviet Union a plan-based approach to economic processes, and tough regulation of production, investment and consumption. The present restrictions to property and ownership rights, monopolistic practices and unpredictable judiciary are also largely pro-Soviet.
Making use of the worst European practices, Belarus resorts to price setting, import substitution, active support of agricultural and industrial policies, support of individual enterprises and tough protectionism (quotas, certification, import tariffs and licenses). Legislative work in the country is also aimed at stimulating demand for products of certain enterprises, ensuring the development of selected sectors and financing economic priorities on privileged conditions.
At the same time, instruments of Belarusian economic policy are rougher and clumsier than in the European Union. Belarusian bureaucracy has willingly become a key element in the presidential system of power. The approach of keeping political and economic power in one place fully coincided with interests of individual sector lobbyists and their representatives in government agencies. None of them needs competition, openness and public and parliamentary control. None of them is interested in assessing the actual efficiency of adopted regulations. To date, there is no profound analysis of such overactive legislative work.
Apart from laws, edicts and decrees, businesses have to grapple with numerous instructions, orders, letters, protocols, ordinances and so on from government agencies. It is simply impossible to find one's way through all of them.
However, the makers of those documents cannot slow down the pace of their work and re-assess the content of them. As soon as the number of different regulations and bylaw acts gets smaller, the top of the government may start thinking about reducing the bureaucracy. The Belarusian lawmaking clan cannot accept this. And there is no one who would challenge this clan. This is why we are witnessing the repetition of same-type legislative documents from year to year, and they never get out of the framework of a tough administratively regulated economy.
Presidential Edict #262, "On Selected Issues in the Operation of Free Economic Zones in Belarus," makes an attempt to breathe in a new life into poorly performing free economic zones (first of them were established back in 1996). When the Belarusian authorities speak about liberalization, it is only with respect to some selected "reservations" and on numerous conditions.
Presidential Decree #12, "On a Park of High Technologies," actually suggests establishing one more zone to solve the problem of a shortage of new technologies, investments and poor modernization of agriculture and industry. If the government continues in such as way, one can expect that special "high-tech parks" will be established for cattle breeding, construction materials and pharmaceuticals.
Here is one example of local ordinance: in November 205 the Vitsyebsk Regional Executive Committee issued Decision #800 "On Tariffs of Sauna Services." According to bureaucrats in Vitsyebsk, market relations should not be allowed to enter such an important domain as the hygiene of the human body.
There are numerous regulations showing how the Belarusian government is interfering with the economy. One of them is the Council of Ministers' Resolution #677 from June 22, 2005. Its provisions are about how exactly space in trade centers should be distributed among tenants (retail stall owners). If the government's passion for regulating everything and everyone does not stop, it will have to issue explanations to things such as a seller, a price tag, etc.
Belarusian lawmakers believe that even science has to be developed as directed by the government. The Council of Ministers issued Resolution #1292 on November 18, 2005 to approve a "Program for Developing New and High Technologies in 2006-2010." It is possible to know new technologies for five years ahead in the dynamically developing world only if people in the government have the gift of Nostrodamus.
Still, the worst legal acts last year are probably Presidential Edict #520, "On Streamlining Legal Regulation of Selected Economic Relations," from November 13 and Presidential Edict #481, "On Streamlining the Procedure of Relieving Business Entities from Economic Responsibility," from October 17.
These documents set up a new mechanism to manage the Belarusian economy. In particular, the president gives himself the right to establish "the procedure of allocation of property owned by the state, set limits of municipal property administration by local authorities, define the procedure of privatizing state property, including respective transactions, and set out responsibilities of government agencies in making decisions in that field."
The Constitution guarantees equal conditions to all economic entities, but Edict #520 allows the president "to introduce tax concessions for selected categories of legal and physical persons and define circumstances in which selected categories of legal and physical persons do not need to pay taxes."
At the same time, the edict says nothing about the criteria for taking such decisions and responsibility of those who will get concessions, as well as about mechanisms of checking those who will give those concessions. It is hard to believe against such a legislative background that Belarusian business can have stable rules of operation, as promised by the president in the All-Belarusian People Assembly.