What an Oil Kick Can Bring Lukashenka to

The regime knows nothing but to be on an oil needle.

Russia can reduce oil exports to Belarus by 12% in the first quarter of 2017 year. Zautra Tvaye Krainy asked economists for consequences of such reduction.

Zlotnikau: The problem cannot be resolved even if the oil supply is doubled.

- Earlier sales of petroleum products made of 1 ton of Russian oil gained profit of $500-600, now amid low oil prices this margin equals to $115. Minus cost of processing and other costs it equals to around $80-100 for each ton, Leanid Zlotnikau makes calculations.

Even if the amount of oil supplied from Russia falls by half a million tons — the same 12% - it can hardly affect the Belarusian economy and income of citizens. Even if it lasts for a year.

- It does not play important role for the economy, Leanid Zlotnikau assures. - Our income has sharply declined after the drop in oil prices. Now losses differ. The importance of oil as an instrument we used to raise money on has drastically declined.

According to the expert, we have been addicted to oil for too long and now we have to learn to live in a different way.

- The problem cannot be resolved even if the oil supply is doubled. There is no way back, Leanid Zlotnikau stresses.

Economist believes that the problem should be tackled with through the productivity increase, production technology improvement and attraction of foreign investments.

- New technologies and knowledge-driven economy should be in the focus. The whole world does this way. It makes such a big gap between economics working under traditional and new technologies, the expert believes.

Meanwhile, it's high time to treat these problems differently. Do current authorities have such desire?

- It could have been, if there had been an understanding. If the government had been aware of the fact that the economy had failed operate under old patterns. It is impossible to explain to people who run the economy adhering to principles of socialism, they do not know anything but it, the expert believes. - But the current situation is an impetus, a persistent one.

Boltochko: Russian influence has been even increased rather than lowered

Meanwhile, expert of the Liberal Club Anton Boltochko believes that amid mounting debts any losses from incomplete delivery of oil will be visible.

- Today even minimum sums Belarus loses are crucial amid high external debt. We need any money that allows minimizing risks of money scarcity to ensure payments to foreign creditors. Even if money scarcity equals to $100-150 million a quarter, it turns to be about half a billion dollars a year, the economist makes calculations.

According to the expert, a strict strategy on economic diversification, but not conflicts between countries should be the lever to increase dependence of Belarus from Russia.

- However, over the past few years despite economic diversification target there have been only few steps made in this direction. Somewhere this concentration has been increased, Anton Boltochko points out.

Is it possible to somehow minimize risks of loss of energy supply?

The expert believes that the development of projects of alternative sources of power generation could be such a step. The experience of some European countries shows that alternative sources of energy can satisfy all needs for electricity.

- Plus, power costs at our enterprises should be reduced, the economist adds. - If we calculate how much kJs go for a dollar of output, we will be leaders in power consumption. That is, energy saving technologies are not common here.

Only an establishment of competitive industry can become the way out.

- And state-owned enterprises can barely do it. If for no other reason than because they have no funds for modernization, the economist notes. - To cease this dependence a strict and developed strategy is required.