Ex-Head Of National Bank Predicts Collapse Of Belarusian Economy

The tendency to maintain unprofitable enterprises is a cancerous tumor of our economy.

Today it became known that the gold and foreign exchange reserves of Belarus in February decreased by $88.9 million. There have been no talks about the purchase of foreign currency as a source of replenishment for the third month in a row. There are also a number of other signals prompting the financial instability of the Belarusian economy.

Belarusian scientist-economist and ex-head of the National Bank Stanislau Bahdankevich in an interview with Charter97.org said that dictatorial methods of managing the economy would lead to its collapse.

- How will the reduction of gold and foreign exchange reserves affect the financial stability in the country?

- I suppose it will not affect it in any way. The fact is that these fluctuations occur constantly, there are pluses and minuses. Such an indicator as 7 billion has already been listed for a long time, several years, so I do not see any particular changes.

I do not share the position that this is some kind of collapse - it is not yet there. So far, there is a fairly stable situation. Look, it happens 7.3, 7.4, 7.2, so what? Nothing special is happening.

- There is another factor of instability - for 15 months in a row, Belarusians have been buying up foreign currency. During this period, the banks “lost” $ 2.2 billion. Another factor is that banks are forced to take unprofitable enterprises on the balance sheet. This year it became known about the Belarusian Metallurgical Plant case, which is actually supported by loans from Belarusian banks. Do you see the danger in this?

- Of course, there is a clear danger here. This testifies that our economy is sick, that it is not recovering. There is a lot of other data: a decrease in the volume of net profit, an increase in accounts payable in the real sector, practically at all large companies, at all state-owned enterprises. This is evidence of a deep crisis that is slowly leading to economic collapse. Slowly, because in the conditions of manual control, this bankruptcy of the economy can be stretched over time.

The path of bankruptcy of the economy continues, and we have been observing it every year for several years. Today there is an even deeper immersion into this abysmal crisis.

We have been observing for a long time that unprofitable companies are maintained at the expense of profits, say, from the sale of mineral fertilizers. This has happened before, but this trend is constantly growing. This is a cancerous tumor in our economy, and the largest companies have been losing money in the recent years.

- Many experts say that Belarus is exactly repeating the scenario of the 2011 devaluation. Do you see similarities in situations?

- Some similarity can always be found, but I would say - time is individual. Today there are big problems associated with the political situation in the country. Foreign investors are afraid to invest their capital in our economy. Outside investors are refusing to lend because Europe's last dictator is still in power. This situation negatively affects the attractiveness of investments in the Belarusian economy.

We are seeing an outflow of personnel, an outflow of investment, and an outflow of information specialists. This outflow goes not only to highly developed countries, but also to Ukraine, Poland, and the Czech Republic. This is what will lead to the collapse of the Belarusian economy.

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