Stanislau Bahdankevich: Belarus to enter deep recession after “elections”

Only hard work of the Belarusians saves the country's economy from a collapse today.

Stanislau Bahdankevich, a former chief of the National Bank of Belarus, said it in an interview with charter97.org.

– According to statistical data, Belarus's GDP has dropped 3.3% since the beginning of the year. This is the biggest fall since 1995. How can you comment on this?

– It was expected, because our industry does not work, export and import fall, plants stand idle, 80% of industrial facilities work 3 or 4 days a week. This is a natural process. It was caused by the refusal to follow a normal development model and the decision to choose the authoritarian command and control model. This model caused the crisis.

The government didn't carry out the necessary reforms – institutional, structural and others. We see the result today. It was expected. Though the reasons are absolutely internal, the crisis was also influenced by the situation in Russia, which faced the fall and recession in the economy.

What concerns the structure of exports, the dependence of Belarusian manufacturing industries on Russia is great and unnecessary. The Russian economy fell, and Belarus, which didn't carry out reforms, didn't diversify its foreign economic relations and tied itself only to the East, was doomed to failure.

– What can you say about Belarus's economic prospects for the near future?

– It's hard to make a forecast today. If the authorities had decided to carry out the necessary economic reforms, we could expect some stabilisation. As far as I understand, Aliaksandr Lukashenka doesn't plan any changes before the elections. He will try to preserve the status quo, and Russia is likely to help him preserve the appearance of “stability” and to give him loans.

The situation is unlikely to worsen dramatically before the elections. But we can expect further recession after the elections.

– What social consequences it may have?

– Living standards are already declining. If earlier we spoke about salaries of $500 or $1000, we have salaries of $400. Official statistical data show that most Belarusians have extremely low income.

We see that problems in monetary and currency sectors begin. Deposits in Belarusian rubles have fallen and deposits in foreign currency, in US dollars, have risen in the past month. It happened after the National Bank launched the “dedollarisation” programme and took measures to restore the Belarusian ruble. It happened because the economy didn't have any positive changes.

Only the fact that people work saves the Belarusian ruble from the total collapse. The Belarusians are very hard-working people. They can keep certain standards of living despite all mistakes of the government. This is the merit of the Belarusian and the national ability to work hard and not to give up in a difficult situation.