Stanislau Bahdankevich: No Loans For Belarus Without Reforms

The national debt of Belarus has already grown by 12% in 2016.

Former Head of the National Bank, ex-deputy of the Supreme Council of the 13th convocation Stanislau Bahdankevich suggests checking the growth of the national debt against the growth (or rather reduction) of the gross domestic product:

“The GDP has fallen; the same has import, export, the population’s revenues, the production… Meanwhile, the national external debt has grown. This means, we got an odd billion and ate it away.

It is clear how it happens: first, there is a need for loans to pay the previously taken loans back, and secondly, more loans are needed to cover the expenses of the production which appear to be growing. Thus, loans are spent on making non-sellers, which cannot be sold abroad or sold at a price lower than the prime cost,” – the Former Head of the National Bank has told in an interview to Radio Liberty.

Stanislau Bahdankevich believes Belarus doesn’t need loans from overseas if no structural reformations in the economy are held, and the efficiency is not raised:

“What do we need loans for? Loans would have been useful if spent on reviving the economy, on the growth of the production, export, and population’s revenues. However, this doesn’t happen.

Loans are necessary for the development. Thus, it shouldn’t be the state which receives them, but enterprisers, economic households. They would invest the money into basic funds, equipment, technologies, to raise the workforce productivity. The MAZ, the MTZ and other state-owned enterprises should receive the loans themselves, base case.

Loans are useful not for the consumption, but for the development. If the IMF provided us a loan under the development program, such loan would have been useful. However, the program should be coordinated with the government. If it is fulfilled, it will lead to the GDP growth. However, if a loan is received but nothing changes, it will only increase the national debt.”