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Minsk, 31 August 2005 By taking a staged and gradual approach to reform, Belarus has avoided many errors and social costs of transition, but may also face serious social and economic implications from delaying necessary change, argues the new National Human Development Report for 2004–2005 “Belarus: Addressing Imbalances in the Economy and Society”.
The report was presented in Minsk on 31 August by UNDP Resident Representative/UN Resident Coordinator in Belarus, Cihan Sultanoglu, the Deputy Minister of Economy of Belarus, Tatyana Starchenko, the report’s scientific editor, Vladimir Shimov, National Coordinator of the UNDP Project "Preparing National Human Development Reports in Belarus", Stepan Polonik.
As pointed out by Ms. Sultanoglu, the Report is a reminder that the notion of human development is much broader than the widely publicized human development index. “Human development is not just about expanding human capabilities such as health, education and income, but also about how people use these capabilities for leisure, productive purposes and for being active in cultural, social and political affairs.”
Written by team of national experts from different backgrounds and disciplines, the report provides an analysis of the achievements and barriers in balancing these two ends of the human development scale.
“This is an analysis done by Belarusians and for Belarusians,” Ms. Sultanuglu said. The focus of the report is on the development imbalances which resulted from the difficult choices made during the transition period among different conflicting priorities. The tension between accelerating economic reform and managing its social costs has been among the most difficult tradeoffs for Belarus.
The report provides numerous examples of this tension. For instance, while the nation’s open-type economy is highly dependent on foreign trade, more than 85% of this trade is with two of its main partners Russia and the EU. Diversifying its exports and expanding the range of its trade partners would make Belarus less vulnerable to sudden fluctuations in these markets, but would also require reforms that would open domestic markets to foreign competition, including for industries that are presently uncompetitive.
Past policies to support loss-making enterprises have succeeded in preventing mass bankruptcies and unemployment but are also draining investment resources from the most dynamic sectors and making the economy less attractive to domestic and foreign investments. Tight administrative control over small business, intended to protect consumers and employees and to prevent fraud and other abuses, is also limiting its capacity to contribute to job creation and the growth of new dynamic sectors, according to the report.
Disturbingly, the gains in terms of social stability and human welfare may not have offset the losses in terms of competitiveness and economic efficiency. According to the report, “serious imbalances resulting in high social and economic losses can occur from premature choices as well as from delayed decisions.”
The report suggests that high economic growth and management of the social cost of reforms are not benefiting all Belarusians equally. Numerous depressed regions have emerged among the areas of relative economic prosperity. The residents of these disadvantaged communities are facing disproportionate risks of unemployment and poverty and are the most affected by the deterioration of the social infrastructures in their communities. Rapid out-migration, high mortality and morbidity and the weakening social fabric are some of the consequences. Chernobyl-affected areas and other special needs regions are in the worst position. Rural dwellers and residents of single-industry towns are also at a disadvantage.
The report stresses that economic growth has been slow to materialize in significant improvements in human welfare. Some of the gravest imbalances in this respect are rapid depopulation, poor public health status, high mortality and other signs of a deep demographic crisis, the crisis of the family unit, growing male-female inequality in employment and economic empowerment, and significant shortfalls in funding for health care and education. In addition, high levels of interpersonal trust and broadening access to means of communication has not translated into higher levels of social activism and public participation.
The report also suggests that broadening the space for individual creativity and initiative would help build a more vibrant and competitive economy and manage the social cost of reform. As stressed by the Minister of Economy of Belarus, Nikolai Zaichenko, in the foreword, the report is relevant for Belarus as a source of ideas on action to provide all Belarusians “with equal opportunity to benefit from these recent achievements in order to improve their living standards and expand the room for their creative self-realization.”
High rates of economic growth, relatively low poverty levels and universal access of its citizens to health and education provide a window of opportunity for Belarus to accelerate its transition to the market economy, improve the environment for small business, raise the effectiveness and efficiency of its social services, empower families to improve their well-being and encourage citizen activism and civil society development, the report concludes.
For further information please contact:
Alexander Piskounov, Project Manager, “Preparation of National Human Development Reports”, at 200–6397, e-mail: , Victor Radivinovski, Officer-in-Charge, UN Department of Public Information, at 227-38-17, e-mail:
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