The Former Head of the National Bank of Belarus: The Range of Banks That Will Be Subject to Restrictions Will Be Expanded

Investors' money can be frozen.

Western banks have closed foreign currency accounts of Belarusbank, Belagroprombank, and Belinvestbank. What does this mean for the banks themselves? What are the implications for finance and the economy?

The website Charter97.org asked the ex-head of the National Bank of Belarus Stanislau Bahdankevich to answer these questions:

- Banks will not be able to make settlements for their clients because they are subject to sanctions. Our banks will not be able to make any payments, for example, for the products of the plant. We can say that the movement of goods, the production of raw materials, materials, and components stops.

The buyer of the product may look for another bank, but, one way or another, this will complicate the calculations. Of course, if such sanctions were applied to the entire banking system, then this would completely stop payments for the supply of components, raw materials, materials, services, and so on.

- European partners very often do not ship goods until they see the money. Can these restrictions create problems for enterprises and slow down the Belarusian economy?

- Of course, the sanctions were applied to create difficulties for the economy with the hope that this will affect our government and force it to change its dictatorial policy.

I always emphasize that sanctions will hinder the development of the economy, but they do not completely stop it.

When banks are under sanctions, the buyer cannot pay for our products either. This is if we are talking about deliveries to the civilized world.

- In your opinion, can these restrictions be applied to other Belarusian banks?

- I believe that the sanctions, which are accepted by the international civilized community, should lead to results - to the resignation of the dictator from his illegitimate presidency. If the sanctions do not lead to this, then they will increase, and the circle of banks that will fall under these restrictions will expand. Today there is already talk that the fifth package of sanctions against the Belarusian authorities is being prepared.

But I think that some measures are needed here so that the sanctions are directed not only against Belarus but also against Russia, which stands behind our dictatorial regime. It is necessary to block any opportunity for the Belarusian economy to breathe. The best way to change the repressive regime into a civilized one is a general strike on the territory of Belarus.

External sanctions can only help, but nothing more. The working class must mature in order to improve the standard of living, its own rights and freedom. To do this, you need to make some personal sacrifices - to temporarily give up your job, your salary. Then there will be a result.

- It became known that the Belarusians took more than 50% of foreign currency deposits from banks. What do you think is the reason?

- Apparently, the main factor is distrust of the authorities. Belarusian depositors understand that this government can take any measures, for example, temporarily stop the issuance of money or not give out dollars to depositors, but Belarusian rubles.

This is distrust of the authorities in general, and, for example, not only of the National Bank. After all, our banks are not independent, they are subordinate to the authorities. People understand that their property can be frozen or seized.

There is also another reason - there is a stratification in society. Some people have a declining standard of living, wages are falling, pensions are low, so they are forced to withdraw their deposits in order to live, dress their children in school, and exist for some time. This does not apply to large contributions but too small ones that the broad masses of workers have. Someone lost their job, someone was kicked out, so they withdraw their savings.

- How does the withdrawal of deposits affect banks and the economy as a whole?

- Deposits are a credit resource. To give the economy, enterprises, and citizens some kind of credit, one must have deposits or another resource. I will deposit money, and then the bank will give it to you as a loan to build a house in the countryside.

Banks do not lend money out of thin air, they act as an intermediary between the depositor and the recipient of the loan. The budget, enterprises, and so on have temporarily free money, which is a resource for lending to the economy. If there are deposits, there are loans. When there are no deposits, the printing press turns on, which leads to inflation and depreciation of the Belarusian ruble.

In economics, everything is interconnected. For some time, Lukashenka did not understand this, so he kept giving loans to unprofitable collective farms and enterprises, which led to huge inflation.

In a normal economy, deposits are the main resource for lending to the economy, business, housing, and so on.

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