Leu Marholin: Government Makes Conflicting Statements

There is still no single economic strategy in Belarus.

Just recently, Lukashenka said that the state support of enterprises had no effect and called for stopping investing the state budget in unprofitable projects.

Will the ruler limit himself to statements only, or will he take real steps? Charter.org.org asked economist Leu Marholin about this:

- Lukashenka has long understood that state-owned enterprises are inefficient, but does not want to part with them. They are afraid of losing control of the country. I can believe that he sincerely realized this, but I can not believe that Lukashenka will take any actions.

Part of the state-owned enterprises died naturally. I think that this process will continue until the others die.

The only thing Lukashenka can do is to sell state property to a strategic investor.

But the problem is that normal investors who are ready to invest large sums in these projects will not come to Belarus exactly. The reason is very simple: the rule of law does not work in the country. Each investor calculates risks and understands that if they comes to Belarus they can lose all their money.

Therefore, the only possible investors in our market are some vague individuals who promise "mountains and marvels". And in fact they need only the premises of enterprises to use for other purposes, rent and so on.

- Minister of Economy Uladzimir Zinouski announced the beginning of a new industrialization in Belarus. On the one hand, Lukashenka speaks of the inefficiency of enterprises, on the other hand, the Minister of Economy says that it is necessary to invest money in them. How can these things be interconnected?

- Easily. We have had no single economic strategy in the country by now. Stating that the old state enterprises are inefficient, we invest hundreds of billions of dollars into loss-making projects with the other hand. No strategy – this is the reason for making such conflicting statements.

- According to Zinouski, the industrialization is aimed at bringing the GDP growth to 100 billion. Do you believe in this?

- I absolutely do not believe in it. May God help us achieve the GDP figure that was in 2013. I think that we will continue to compare indicators with this year for a very long time. Moreover, even this figure is impossible without any changes.

The statements of the Minister of Economy on the new industrialization are like Hitler's statements about secret weapons at the end of the war, on which he counted.

The IT sector can not give such a push to the difference in the economy. Anyway, serious growth in the share of the GDP from this growth is not expected.

If we take a look at modern clusters, industrial ones, for example - biotechnologies, nanotechnologies, we’ll see they cannot bring dividends without serious investments from outside. The state can also invest money, but serious investors who possess patents, technologies are needed.

Such investors will not come to Belarus by definition. This will continue as long as there is such a situation in the country. The competition in the world for such investments is very high, and Belarus does not have a trump card to win in this fight.