13.05.2021

Dad is sweeter

The National Research University Higher School of Economics (HSE) has released the study “Cross-Country Comparison of Salaries in 2011-2017”. According to HSE experts, Belarus is ahead of Russia in terms of real wages. In 2017, in Belarus, the salary in US dollars at the exchange rate of purchasing power parity (PPP) of the population amounted to $ 1,648.3, while in Russia the real salary was fixed at $ 1,640.4. At the same time, salary at the nominal exchange rate was higher in Russia: almost 670.9 dollars compared to 421.9 dollars recorded in Belarus. Of all the CIS countries, Kazakhstan (1252 in PPP) and Azerbaijan (1252.4 in PPP) were the closest to these indicators, according to the calculations of economists from the HSE.

Reference: Purchasing Power Parity is an economic term denoting the ratio of two currencies based on the prices of similar goods in two countries. Suppose that a certain standard set of goods in Russia costs 500 rubles, and in the United States – 25 dollars. Then, based on PPP, the fair rate is the ratio: 500 divided by 25 – a total of 20 rubles per dollar. ( www. banki. ru)

When discussing the economy of the Republic of Belarus, they sometimes mention the “Belarusian economic miracle”

Natalya Radko left with her husband in Minsk in 2011. Spouse Natalia headed the branch of a large international company. They do not lose ties with their homeland, periodically return back and do not plan to stay in a neighboring country for permanent residence. They do not plan to change their citizenship either, although, Natalia noted, they can already receive a residence permit.

Natalya said that on a trip to Novosibirsk for a basic set of products (bread, milk, cheese, sausage, etc.) she spent an amount equivalent to about 15–20 US dollars (when the rate was 30 Russian rubles for 1 dollar). She claims to have started spending the same amount in Belarus only now – after the local financial crisis and the 2016 denomination. Two years ago, a monetary reform took place: 10,000 old Belarusian rubles were exchanged for 1 new Belarusian ruble, which led to higher prices for some goods.

“Earlier everyday expenses here were 5-6 times less than in Novosibirsk. Since then, Minsk has become more and more like Europe, prices are expected to rise, but still approximately at the level of Novosibirsk in 2011. <…> But there is one significant factor: from Novosibirsk you won’t go to Poland or Vilnius to buy cheaper goods in bulk such as household chemicals, clothes, and some food products. It was common practice here in the 90s, and now many are doing the same, ”said Natalya.

Radko announced the prices of some goods in new Belarusian rubles (1 Belarusian ruble is equal to 30 Russian rubles) and noticed that for some goods prices are still lower than in Novosibirsk.

A quality sausage in Minsk costs 10-12 new Belarusian rubles per 1 kg, lamb – 7, pork, chicken – from 6, beef – from 12, cheese – from 10, eggs – from 1 to 3 Belarusian rubles per dozen, milk – 1 –2 per liter. Good cucumbers in the market – 2 rubles, in the store – more expensive and worse. Pomegranate juice per liter – 8 new Belarusian rubles.

“In Russia, many are accustomed to consider dairy products from Belarus the most delicious. I would say: nothing special they are not.

Most of the milk is normalized, as in Novosibirsk. But to find sour cream from whole cream is an impossible task, however, its price is 1-2 rubles per 0.5 kg, depending on the fat content. But here it should be noted that Minsk is a capital city, and this affects prices not for the better, ”says Natalya Radko.

The state intervenes in the production of certain Belarusian goods, which affects the quality of these goods

The fact that Minsk is not an expensive city is also noted by the former Novosibirsk business consultant Vyacheslav, who moved to Belarus to work under a contract. The man noted that in terms of monthly expenses, he spends on himself, especially on sports and a personal trainer, a lot, which differs from an ordinary person. However, he uses the same services on an equal basis with the rest and can talk about price differences.

“What is cheaper than in Russia is state medicine and a number of state services, such as public transport.

A metro ride costs 65 Belarusian kopecks, a bus costs 60 kopecks. <…> The country’s motorization is high, maybe higher than in Russia. A diesel engine costs 1.37 rubles per 1 liter, the 98th – 1.48 Belarusian rubles, ”says Vyacheslav, and at the same time notes that many prices are low because they are tightly controlled by the state.

“The authorities here are climbing a lot. For example, a can of imported beer costs 6 Belarusian rubles, while a local beer costs 2.6–3 rubles per liter. But you can only drink it in a financial crisis. The authorities simply force brewers to use local malt. <…> The Internet here is also bad. Only MTS has 4G. But cellular is cheap in itself. Of the providers – Life, Velcom (Austrians) and MTS, ”said Vyacheslav.

Vyacheslav also spoke about the high percentage of black money in the market of this country. “Many things are done and bought in black: paid in cash dollars. Car services many work through payment in dollars. The percentage of “chernukha” is higher than in Russia, but is gradually falling, ”the businessman noted and added that small business, on the one hand, is in more favorable conditions: the so-called simplification is applicable – 3% excluding VAT or 5% with included VAT.

But to work here, according to a business consultant, they go mainly to the IT sphere.

After all, in order to attract a foreign worker, you need to obtain a work and residence permit, as well as documentary proof that you can’t take a Belarusian to this place.

Both Natalya and Vyacheslav are both convinced: there is no economic miracle in Belarus. “I think it’s not Belarus that sharply accelerated the pace of economic growth, <…> this is Russia, alas, it is slowing down more and more. After all, if we talk about salaries and their ratios, then those who worked in representative offices of foreign trading companies and received money through Moscow began to receive salaries in foreign currency not even twice, but four times less, ”said Radko.

“This is a lie or error in the calculation methodology or in the source data. The Republic of Belarus is poorer than Russia, ”Vyacheslav echoes.

All experts are convinced: the calculations of the Higher School of Economics were inaccurate

On the whole, the leading researcher at the Institute of Economics, Yuri Voronov, agrees. According to the Novosibirsk economist, his Moscow colleagues from the HSE initially incorrectly calculated.

“This is the economic miracle of the Higher School of Economics. Belarus and Russia have different consumer baskets: it is impossible to compare them. <…> For example, in the Russian basket of 18 food items, six are fruits and vegetables. But in Belarus this share is less, the set of vegetables is different. <…> It is also quite obvious when the prices for utilities, electricity, etc. are regulated as in Belarus, then the costs in the consumer basket will be less, therefore, the real wage will be higher. <…> And also: if your country has a difference in income between the top 10% of the population and the bottom 10% ten times, this means that there is no middle ground, there is a failure. And in another country (Belarus. – I.K.) the difference is 4–4.5 times. And how can one compare here? ” – the economist Voronov perplexedly remarked and recalled a joke about how one eats a chicken, and the second does not eat anything, but together they eat half a chicken. Yuri Voronov called such works simulacra, which are created only in order to imitate scientific activity.

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