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Barys Zhaliba: Empty stomachs of working class will recall it is hegemon

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Barys Zhaliba: Empty stomachs of working class will recall it is hegemon

Inflation in Belarus will sharply increase in the near future.

Russian president Vladimir Putin recently introduced a bill to the State Duma that proposes to eliminate the dollar and the euro from trade between member states of the Eurasian Economic Union. It is planned to use national currencies and then create a common financial market. Vladimir Putin earlier spoke about the introduction of a common currency of the “union state” and the Customs Union.

Doctor of Economics Professor Barys Zhaliba said to eurobelarus.info that Putin's new initiative, which went unnoticed by many, was dangerous for Belarus.

“We remember that imposing the Russian ruble on Belarus began long ago when Viachaslau Kebich was prime minister. The question was later constantly raised by Russian leaders at talks with Aliaksandr Lukashenka. I think Lukashenka understood in proper time what a threat the Russian ruble poses – he will lose the emission centre, Belarus's budget will be approved in Moscow and he will have no instruments to control the country,” Barys Zhaliba said.

As for the proposal to use national currencies, it is a veiled attempt to make weaker economies start using the Russian currency, according to the analyst:

“It's clear that it will be the Russian ruble if we consider GDP of Russia and GDP of other CIS countries. Look, Belarus's and Kazakhstan GDP is only 3% and 4% of Russia's one respectively. How should we transit to national currencies? Only the Russian ruble will be in use. As a result, our economic sovereignty, even as weak as we have today, will be destroyed. The threat hasn't become weaker. Putin's latest proposal is extremely dangerous for Belarus.”

“Developments may be unexpected. Putin will insist on his dedollarisation idea, but his main aim is to restore the empire, so we can clearly see he wants a wider spread of the Russian ruble. Putin will use the weakness of economies of CIS members, first of all the Belarusian one, and take them with bare hands. We already saw what Putin does in the so called Russian World,” Barys Zhaliba says.

The Belarusian economy has no prospects even if the country follows the established model, the economist thinks.

“This model is based on the protection of the autocracy in Belarus. It greatly depends on the Russian economy through oil and gas prices and the Russian market, which remains the main consumer for our country. The internal model hasn't been changed. The National Bank reduced monetary emission, but we still have it. GDP is falling, the amount of foreign currency is declining, but the amount of Belarusian ruble is growing. It's no surprise that we have a new aggravation of the permanent crisis. We were restricting the ruble rate, and it fell by 30% in December 2014. The fall during August was about 20%. It will continue forever. By the way, inflation has a seasonal character. The inflation rate is quite low now, but I think it will increase by the end of the year,” Barys Zhaliba thinks. “The best-case scenario is that the Belarusian economy will remain at the current level, and the worst-case scenario is that empty stomachs of the working class will recall that it is the hegemon.”

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