Economist: Belarusian Authorities Are Heading Towards a Dead-End

The driving force of the Belarusian economy in recent years has been people who have learned to live without state support.

As a result of the political crisis, the economy of Belarus has been thrown back 5-10 years: from plans that implied movement towards more market mechanisms to administrative control, said the economic observer, founder of the YouTube channel Chaly LIVE Siarhei Chaly during the Reshape online conference, writes tut.by.

"We are conserving low rates of economic growth"

The driving force of the Belarusian economy in recent years has been people who have learned to live without state support. Even before the elections, the economy approached its natural limits of growth, when in order to grow further, it was not enough to maintain the status quo in the role of the private and public sectors. One of them, the most effective, had to take a more weighty position. The transition to a new stage of economic development would lead Belarus out of the trap of low growth rates, the economist said.

- We came to the point when the new economy required a large flow of labor and competencies from the public sector. But, starting with the coronavirus and ending with what happened after the elections (especially the power signals of the ANC that there are businesses that need to be cut out), this prospect has been closed. The people who formed the backbone of this economy, in the elections, presented a different demand for the quality of state services in exchange for the taxes that were paid. Now they are demotivated right up to the decision to leave the country.

At the same time, the economist says, the planning horizon has shrunk, affecting consumer and investment activity.

- We not only preserve the low rates of economic growth and the impossibility of transition to its new quality but, by doing so, we preserve the lag behind our neighbors.

- The authorities begin to live as if in virtual reality, in which they won, everything is fine, the economy is growing. The emerging view of the picture of the world is quite stable. If you look in the paradigm of a conspiracy of the whole world against you, then the defense mechanisms against reality are built in such a way that you are increasingly building yourself a hermetic system in which everything is fine. And anyone, who tries to say that this is not so, instantly fits into the system as an enemy or an element of this conspiracy, says Siarhei Chaly.

History shows that, in the event of a large separation of the authorities from reality, castles in the air were destroyed only as a result of some serious shock, the economist points out.

"How will the state live?"

The expert believes that the threats of loss of sovereignty have become less relevant and acute than they were previously felt.

- The moment when it seems to the authorities that there is no price that they would not be willing to pay in moving towards the final victory over their enemies creates a situation in which the threat to sovereignty decreases in the sense that the asset [Belarus] becomes so toxic that acquiring it in the form of, for example, a takeover becomes unprofitable for Russia itself, Chaly says.

The economist assesses the route that Belarus is following as a dead end.

- Do both sides (supporters and opponents of the government) understand how the state and the economy should be arranged, if we exclude the irreplaceability of power and the impossibility of the election's influence on anything? If those who are well able to distribute, rather than invest and multiply, come to power, and those who are able to do the latter leave or remain in prison, then the question is, at the expense of what will the state live? - asks Siarhei Chaly.