Stanislau Bahdankevich: Belarus's inflation rate is highest in world

The authorities have been unable to cope with inflation for 20 years.

A devaluation is an effect rather than a cause of the country's economic problems.

Former chief of the National Bank of Belarus Stanislau Bahdankevich said it to Yezhednevnik, commenting on the initiative of Belarusian business associations to officially announce the de facto devaluation. Leaders of business unions made this proposal at a conference in Minsk on December 24. “The country needs to recognise the devaluation on 1 January 2015 and take measures to support people and the key economic sectors,” said Zhanna Tarasevich, the director of the Business Union Entrepreneurs and Employers named after Prof. Kuniavski. Businessmen say that existing parallel exchange rates have a negative impact on the country's economic situation.

Stanislau Bahdankevich, however, thinks that the main problem is the cause of the devaluation rather than devaluation.

“The main question is why the government allowed it to happen. The devaluation and inflation are rather an effect than a cause of economic problems. I don't say the government should not announce a devaluation. But it should have prevented it,” Stanislau Bahdankevich said.

According to him, the most reasonable solution would be a devaluation as a part of system reforms to cure the country's economy.

“For example, a devaluation of the national currency would be one of the articles, for instance, the tenth, in the programme aimed at forming a new economic model. Our inflation rate is the highest in the world. We have been unable to cope with it for 20 years. The problem of high interest rates remains unsolved. An interest rate of more than 10% harms the economy. We should take these problems as a whole. A devaluation should be among the measures proposed in the programme. But it cannot solve the problem of the ineffective economy,” Stanislau Bahdankevich is sure.

He admits he sees no sense in refusing to recognise the de facto devaluation that took place in December.