Belarusian Authorities to Cry Soon, Economist Says

Lukashenka's economics runs off the tracks.

Thanks to the global price situation, Belarus levelled the budget deficit in the second and third quarters of 2021.

But, as the poet said, "great things are seen from a distance".

The highest level for such an indicator as gross domestic product was $78.8 billion equivalent in 2014. It has never been surpassed since then, nor will it be in 2021. Since then, we have had more or less success (GDP was minuscule in 2015-2016) in restoring economic growth, Boris Zheliba, PhD in economics, writes in an article for Narodnaya Volya.

At the end of the three quarters of 2021, the Belarusian economy grew by 2.7% year-on-year, and growth in the third quarter came down to 1.4%, while Estonia's GDP grew by 8.6% year-on-year, Poland's GDP by 5.1%, Lithuania's GDP by 4.7% and Russia's GDP by 4.3% during that quarter. Moreover, the countries with the lockdown had a greater drop in GDP than in Belarus. However, the recovery of GDP growth is more intensive. In the fourth quarter, low growth rates continue. In October, Belarus' GDP increased in annual terms by only 0.2%, in November - by 1.3%.

What changes in the qualitative condition of the Belarusian economy occurred in 2021? Investment in fixed assets decreased by 6.2% in January-November. The decrease fell to the low base of 2020, then for eleven months investment fell by 4.3%. The decrease in real investment remains one of the main problems of the Belarusian economy. The economy is still burdened with debts. They are growing from year to year. During the first ten months of 2021, large and medium-sized organizations have directed 68.5 billion rubles to repay loans or 14.9% more than during the comparable period in 2020. The amount of these debts, together with accounts payable, has long exceeded the country's annual GDP. 21.5% of the flagships were unprofitable, and 32.9% had sales profitability in the range of 0-5%. Consequently, the share of unprofitable and low-margin large and medium-sized enterprises was 54.4% at the end of ten months.

Such flagships as, let's say, Gomselmash and BMZ are burdened with huge debts. Early that year, the Ministry of Finance launched an unscheduled issue of foreign currency bonds worth over 600 million dollars, which the banks bought to save BMZ from bankruptcy. As of the new year 2022, many flagships again stand in line for preferential, so called directive loans for multi-year deferrals in repayment of the taken loans or their writing off. They cannot work without budgetary support. Moreover, no one can play games with the working class. Why is the government raising taxes and fees on small businesses? They will take money from businesses and the population to invest in the unprofitable public sector.

If our economy is doing so well, why is the government again negotiating with the Eurasian Development Bank for a $3.5 billion loan to compensate for the loss of foreign exchange earnings due to Western sanctions, as First Deputy Prime Minister Nikolai Snopkov reported? The Russian leadership has never left a loyal ally in trouble and has always given a helping hand. This is likely to happen this time.

The temporary successes in the economy, caused mainly by external factors, gave ground for a number of statements by the authorities that the Western sanctions would not damage the Belarusian economy too much. Nevertheless, the government is preparing for a severe blow to the country's export capabilities this year. Therefore, it is planned to increase the supply of goods to China by as much as 32.2%. It implies an increase of $300 million from what has been achieved. It's planned to increase Belarusian exports to other Asian countries by 26.5% and African countries by as much as 53.6% in the form of tractors, trucks, agricultural machinery to Zimbabwe, Malawi, Egypt and other states. However, poor Africans do not always have enough currency to pay for Belarusian exports. Given the embargo imposed by the Belarusian government on food supplies from the EU, the UK, Norway and other "unfriendly" countries, which supported the sanctions against Belarus, the exotic barter with the "black continent" will be useful.

Anyway, top officials have nothing to boast of. If they are rejoicing today at the temporary success, they will soon cry, as Belarus is becoming an outcast in the civilized world. Its economy will collapse because of the dictatorial policy.