Expert: Belarusian economic model is dead end

The Belarusian economic complex is in a situation when old means don’t work for further development.

Alexander Fadeev, the head of Belarusian Department at the CIS Countries Institute, told it to a REGNUM correspondent on March 31.

According to him, the Belarusian economic model, described by the government and president as the most state-of-the-art, has shown itself as a deadlock development model. Belarus has no other alternative but to follow the way already chosen by all countries of the Central and Eastern Europe, including Russia. “This is a course of deep economic reforms. Belarus has been rejecting this course stubbornly since 1997. Until 1997, the country was following this way alongside with Russia and was adjusting development. After 1997, the Belarusian president decided to choose another way. Sooner or later, this way was bound to come to what we are having today: overfilled stocks and huge resources of the country’s international reserves being spent to support the ruble. This artificial means to support the national currency rate cannot continue for a long time,” the expert said.

Fadeev reminded about the recent devaluation in Belarus, “but the Belarusian financial system will face even more serious devaluation soon,” he thinks. “It is inevitable. It doesn’t matter who will suggest Belarus to carry out devaluation, the IMF or Kudrin on behalf of Russia’s Ministry of Finance. Belarus will have to devaluate its national currency sooner or later, because country’s current income, development of country’s economy, and foreign loans have led to the situation when the national currency rate is not enough for country’s assets,” he said.

Fadeed thinks that the exact date for devaluation is not important. It doesn’t matter when it will happen, but “it is just necessary in the short term”. “As I estimate, the budget gap will be $2.5bn. This gap needs to be filled with either foreign resources or deep structural reforms, which will lay the foundation for successful investment in the Belarusian economy,” he said.