19 January 2018, Friday, 12:22

Stanislau Bahdankevich: Russian loan to end sooner than in six months


The loan from Moscow is harmful for Belarus’s economy.

Stanislau Bahdankevich, a former National Bank chief, shared his opinion on the Belarusian economy in 2014, eurobelarus.info reports.

- Belarus’s currency earnings reduced by 6,798.8 million dollars in January-November 2013 compared to the same period of 2012. Why did the currency inflow fall by almost 7 billion?

- The oil products exports fell after Russia had reduced oil supplies to Belarus in the fourth quarter. Another important reason is the export of potash fertilizers that significantly dropped due to the potash war. The two mentioned sources account for 6 billion of losses.

The rest losses are minor: We failed to reach targets in the automative industry, the Russian market significantly narrowed for Belarusian products. The only products that are sold well in Russia are milk and butter, the agricultural products.

- How strongly was the Belarusian economy hit by currency losses?

- A part of losses was compensated by foreign loans, but the government’s debt increased. Belarus’s gross debt reached 37 billion dollars on October 1.

The second criterion is the deterioration of the country’s economic situation: profitability fell and losses doubled. The economy worsens in all directions. We are still alive because banks continued to print money. The external debt of banks exceeded all planned figures, so the EurAsEC Anti-Crisis Fund didn’t give us the last tranche of 400 million dollars. Banks exceeded the targets on issuing domestic loans, debts grew by 20%.

The inflation was galloping.

- Putin made a New Year’s gift of 2 billion dollars for Lukashenka. It saved the Belarusian ruble from the collapse. Lukashenka brought only 450 million dollars from Moscow. For how long will this sum last?

- I think it will end sooner than in six months. But the government plans to sell the state’s property: the Mozyr oil refinery, the Minsk Wheel Tractor Plant, MTS (not for 1 billion dollars, but for 800 million).

We should take into account loans for the construction of the Belarusian power nuclear plant (the Russian government issued 500 million dollars at the year’s end). Parts of these loans will be used inside the country.

Things are bad in general. The country’s trade deficit is 5 billion dollars in 2013.

- How is it profitable for Belarus to take a 2bn loan from Russia? Moscow used to give loans over decades, but now Belarus will have to pay it in 2017.

- It is not profitable in the sense that it gives the status quo. The loan is harmful for the country from a professional point of view because it allows preserving the ineffective economic model instead of carrying out reforms.

Belarus needs a national economic programme to spend not less than 50% of the national product on economy’s needs. Now 30% of the national product are spent on economy and 70% on imports.

We don’t develop small and medium-sized businesses that could make half of the economy. Now this sector accounts for 20-30% of the country’s economy against 50-60% in Europe.

Our economy is not diversified. Exports in Belarusian goods to Russia reach 90%. It’s because the country has the old mentality. It is ruled by an old team of my colleagues. Fresh people are needed in the government, regional authorities, plants’ management.

The economy’s effectiveness fell, losses increased, incomes fell to 60% (in the third quarter compared to 2012). They help us to remain fully dependent on the Russian market.