Thursday, 25 December 2008YAROSLAV ROMANCHUK,
President of the Minsk-based Mizes Center, Belarus
The policy followed by the Belarusian authorities during the financial and economic crisis confirms the axiom of the economic influence on the politics. In Belarus the economic situation exerts considerable influence upon the politics. The Belarusian authorities were not ready for the economic slack. Undoubtedly, the country faces not only the financial but also structural economic crisis.
This is shown by the economic indicators of the last quarter of the year 2008. Belarus witnesses a serious decline in output. The retail turnover has been falling for two months – in October it fell by 3.8%, and in November – by 8.5%. In 2009, the fall may make up 25-30%. In October-November the putting of dwelling houses into operation slowed down.
The total trade balance deficit has grown by 47%, the trade balance deficit with Russia has grown by 87%. The storehouses are being packed with the unsold products that cost over $2 billion. Belarus’ external debt is $4.6 billion with the banks external indebtedness having grown by 25%. The money supply increase is accompanied by strained situation in the currency market and the Belarusian ruble is being devalued. The organizations managers reduce the working week giving leaves to their employees.
This has not been indicated by the official statistical figures yet, which is causing the Belarusian authorities great concern. President Aliaksandr Lukashenka of Belarus said that all the enterprises should turn into the ministries of trade. True, he did not specify what they should sell.
Aliaksandr Lukashenka continues to be the decision making center. Three anti-crisis groups are created within the government, which compete against each other. Aliaksandr Lukashenka, feeling the situation better than anyone in the Belarusian government, said that the Belarusian economy must be liberalized. However, the liberal reforms won't be radical to solve all the existing economic problems.
If to return to the 2005 prices and volume of production, Belarus should raise $17 billion to maintain the 2008 economic level in 2009. Of course, Belarus would fail to do that even with no account taken of the new gas price in 2009.
As a result, the Belarusian President acts as the government, National Bank and a creditor. He looks for money, tries to borrow it from Russia, Germany and other countries, and seeks to sell something. Belarus’ economic situation is worsening rapidly, this way the market economy differs from the centralized economy
The crisis came to Belarus from Russia. Now Russia buy fewer Belarusian goods, non-payments started and protectionism became stronger. When Russia stops buying Belarusian goods and increases the gas price, the situation will become still worse. Aliaksandr Lukashenka, during his visit to Moscow, tried to avert rise in the gas price and to obtain an extra credit. Previously Siarhiej Sidorski, Belarusian Prime Minister, said that the Russian ruble could become the regional currency.
Russia raises the issue of recognition by Belarus of South Ossetia and Abkhazia’s independence. But Aliaksandr Lukashenka’s receiving what he wants for the recognition would mean that Russia is ready to pay a high price for its ambitions and emotions and that the Belarusian President knows the Russian authorities’ psychology well.
December 25, 2008 |
Thursday, 25 December 2008
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