Sharp decline in state crediting will affect the salaries of Belarusians.
In 2017 the state will dramatically reduce directed lending.
The current sum of state support is by 32.1% less than the previous year, and it will be only 1.9 billion Belarusian rubles of directed credits. The economist Leu Marholin commented on this decision of the Council of Ministers to charter97.org.
– This is a step in the right direction, but unfortunately it is a too timid step, like all that we do. Because directed lending is to be abolished, not reduced. After all, even if it is cut by 30% every year, this will last for five years, and our economy will not survive this directed lending for so long. Lending – it's purely economical process, which should be performed by both sides: a lender and a borrower. State shouldn't interfere here at all.
– What can such reduction cause?
– The fact is that this is a forced measure. The state is running out of money and it has to sacrifice something, in particular, the funds that were allocated for directed lending. If it goes as it has been going, then, probably, they will have to cut salaries of law enforcers or something else. When there is no money, we have something to think about. They may cut salaries in the public sector.
The most important thing here is that nothing is said about structural reforms, which have not just ripened - they have already overripen ten times. But not a single world has been said about this.
– Which sectors of the economy can the reduction of directed lending affect?
– Many. These are agriculture and large state-owned enterprises such as MAZ, Gomselmash, tractor manufacturers.
– If the directed lending is cut, then, maybe, there's a need to create the appropriate conditions for private business?
– One is absolutely not connected to the other. They just say to the director: you count on a loan of, say, 20 million, but you'll get only 15 – do your best! That's it. Further recession, continued stagnation, a further reduction in production and jobs are awaiting such enterprises. The fact of the matter is that such measures would make sense if carried out in the framework of complex structural reform. Then it would be clear. Part of inefficient state-owned enterprises would be closed, which would make it possible to save some money. Unfortunately, there's no mention about this. Most likely, the reduction of directed lending will be carried out on a "cut down for everyone" principle.
We remind, that drastic reduction of state support has begun in 2016. According to the Ministry of Finance, the volume of state support provided to legal entities and individual entrepreneurs amounted to 1.07 billion denominated Belarusian rubles in January-September 2015. Thus, as compared to January-September last year, the volume of state support of the economy has dropped by more than 3.5 times.