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ROMANCHUK TOMORROW  

GOVERNMENT TODAY

1.      

Main source of new jobs – entrepreneurs and small business.

Labor market is based on big state enterprises.

2.      

Technological modernization – by private investors.

Modernization by decree within five year plans.

3.      

The state based on the rule of law: reliable legal property rights guarantees, independent judiciary.

Property is in the hands of nomenclature, country is governed by decrees, “telephone” rights of bureaucrats.

4.      

VAT reduction to 15%, introduction of the single social security tax – 15%

VAT increase to 20%, wage taxes – 35%

5.      

Unemployment benefit – $120 a month

Unemployment benefit – $16 a month

6.      

Insurance against job loss, guarantee of the minimal set of medical services that is provided at the expense of the budget.

Forcing enterprises to keep “excessive” employment, deficit of high-quality medical services.

7.      

Each person will be paid $500 when he moves from a mono-city to a different job.

No incentives to find a job outside mono cities.

8.      

Building dormitories for youth and workers at the expense of budgets.

Building hockey palaces and overhaul of administrative building.

9.      

Abolition of forced assignment of university graduates.

The increase of the time of forced work upon university graduation (at the job chosen by the university administration)

10.   

Abolishing licensing of free trade and introduction of a patent for individual entrepreneurs

High taxes and expensive rent for individual entrepreneurs.

11.   

Abolishing licenses for tourist services, catering, household services.

Total control over all kinds of economic activities.

12.   

Abolishing all hiring restrictions for individual entrepreneurs.

An individual entrepreneur can hire only three close relatives.

13.   

Selling out the assets rented by private SMEs and IEs at low prices.

High rent rates.

14.   

Launching privatization: 60% of privatization revenues will be directed to State pension Fund for investment, 10% of stocks is given free to employees of privatized companies, an investor is sold the control stock at an open auction. No privatization conditions are imposed on investors who buy SMEs. land is sold together with assets.

Nomenclature controls all state assets and sells some assets without any auction, seizure of state assets by powerful lobbyists.

15.   

Demonopolization of telecommunication market, breaking “Beltelekom’s monopoly on purchasing international internet traffic.

Monopolist “Beltelekom” sets tariffs and prices 100 times higher than internet prices in market economies.

16.   

Private property on land, creating full-fledged land market.

Land is not included into the commercial turnover Nomenclature manages it and abuses its powers.

17.   

Visa free regime for citizens of EU countries, carrying out negotiations to introduce visa free regime for Belarusian to travel to EU countries.

Expensive Belarusian visas for EU countries citizens, expensive Schengen visas for Belarusians.

18.   

Joining WTO and unification of Belarusian legislation with norms and standards of WTO and international trade.

Self-isolation, severe trade protectionism,

19.   

Free Trade Area with Russia, Ukraine and EU. Adopting the strategy of full-fledged integration into EU

Customs union with Russia and Kazakhstan than does not work. Intensifying trade conflicts with Russia.

20.   

Autonomy of universities, giving universities all assets and land free of charge. Stimulating competition at the market of educational services.

Monopoly of Ministry of education, discrimination of private educational institutions, deterioration of educational standards.

RESULTS

A Belarusian will work 240 days for himself and his family (personal income from wages and other sources) and 125 days for the state (taxes, bureaucracy)

A Belarusian works 115 days for himself and his family, 250 days (68% of the time) for the state (taxes, bureaucracy).

GDP per capita in 2013 – $9500

GDP per capita in 2013 – $6300

Average monthly wage in 2013 –  $600

Average monthly wage in 2013 – $350

Export per capita in 2013 – $6000

Export per capita in 2013 – $4000

Foreign direct investment per capita in 2013 – $2000

Foreign direct investment per capita in 2013 – $700

Share of hi-tech goods in manufactured export – 15% (in 2010 it is 3%)

Share of hi-tech goods in manufactured export –  – 5% (in 2010 it is 3%)

Place in Ease of Doing Business rating (World Bank): 25^th out of 180 countries (in 2010 Belarus ranks 58^th)

Place in ease of doing business rating (World Bank): 65^th out of 180 countries (in 2010 Belarus ranks 58^th)

Place in Economic Freedom rating (Heritage Foundation): 30th out of 180 countries (in 2010 Belarus ranks 150^th)

Place in Economic Freedom rating (Heritage Foundation): 130th out of 180 countries: (in 2010 Belarus ranks 150^th)

Place in Human Development Index (United nations): 45^th out of 180 countries (in 2010 Belarus ranks 67^th).

Place in Human Development Index (United nations): 70^th out of 180 countries (in 2010 Belarus ranks 67^th).

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Available resources and investment potential (three year program)

Financial liabilities (three year program)

1.

Legalization of activities of individual entrepreneurs, getting at least $2bln. out of the shadow economy.

Support of the unemployed and their retraining – $3bln.

2.

Legalization of activities of SMEs, getting at least $2bln. out of the shadow economy

Paying employment fees for moving from mono-cities – $300mln.

3.

Foreign investors and transnational corporations – ~$10bln.

Building dormitories for youth and workers –  $1,5млрд.

4.

Privatization of big, medium and small state enterprises ~$10bln.

Investment in road infrastructure – $3bln.

5.

Debureaucratization effect: commercial entities will have additional ~$8bln. at the expense of radical reduction of compliance costs.

Expenditures to modernize the system of water supply and garbage utilization – $300mln.

6.

Tax reform effect (tax reduction and simplification of tax administration) – ~$6bln.

Modernization of energy system – $2bln.

TOTAL: ~$38bln.  

TOTAL: ~$10,1bln.