30 September 2022, Friday, 22:25
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Expert: All Problems In Belarusian Economy Have To Do With Lukashenka

Expert: All Problems In Belarusian Economy Have To Do With Lukashenka

Why do the stories of the government about the "economy rescue" look ridiculous?

The Ministry of Economy of Belarus has published a 22-page report "Measures to Support Economy, Business and Population". But independent economist Uladzimir Kavalkin considers the outlined measures ineffective, especially in today's situation, Belsat reports.

"We have collected all the key measures to support the economy and the population in the conditions of sanctions from unfriendly countries in a single publication," says the agency, presenting their report.

The bulletin published by the Office contains the main decisions taken at the level of Aliaksandr Lukashenka, the Council of Ministers and the Operational Situation HQ under the Government. They are said to be "focused on five priority and topical areas":

supporting exports through increased lending to exporters and lowering customs duties for imported goods in production for export;

building new transport and logistics chains;

stimulating import substitution;

liberalization of the business environment;

sustainability of the labour market and social protection of the population.

The Economy Ministry says these measures are designed to address two strategic objectives: reducing the impact of sanctions on the population and ensuring the stability of businesses. As a result, the ministry says, macroeconomic dynamics will improve and the GDP growth will resume in the second half of 2022, and employment will be secured, labour productivity will increase and salaries will rise.

What the Ministry of Economy Boasts of

The measures, which the Ministry of Economy boasts of in its bulletin, are not new. They are partly a list of various decrees, orders and recommendations that have been adopted throughout 2022 and which concern economic activities in one way or another. The most recent ones came into effect more than a month ago - on June 29 - and some from as early as January 1.

The bulletin itself was published on August 1 - the day one of the measures described in it ceased to be in force: a temporary ban on the export of rice, cereals, pasta and flour. According to officials, this was supposed to promote the development of the domestic market and price formation. A temporary licence ban on exports of sugar will end on August 17.

Several other measures will cease to be in effect as of the new year. They include:

changes in public procurement;

postponement of the deadline for the mandatory use of cash register equipment;

reduction of the time frame for review of documents for certification of own production;

extension of deadlines for a number of investment projects;

optimization of registration of medical devices and medicines.

"A Way to Try to Show Some Action"

Uladzimir Kavalkin, head of the Kosht Uradu project, called the Ministry of Economy's bulletin a good overview of what is being done. However, he stressed, the measures described do not solve any problems.

"It is a way of trying to show some action to make it easier to do business in the country against the background of the inability to influence the real cause. There's a series of measures involving administrative procedures, in the spirit of 'we'll make it quicker for you'. To add some money to export operations and thus support exports which are falling due to sanctions. And that's all on the whole," said Uladzimir Kavalkin.

The economist notes that the problems of the Belarusian economy today are not related to administrative procedures, but to sanctions and the inability to borrow on international markets. Instead, according to Uladzimir Kavalkin, "the authorities are trying to change things manually".

"They've Allowed a Lot of Things Which Shouldn't Be Allowed".

The economist singled out changes in public procurement:

"On the one hand, they expand the field for corruption, but on the other hand, it's clear why this is happening: because no one wants to work with Belarus. It is obvious that the already small number of suppliers will continue to decrease. Therefore, they have allowed many things which should not be allowed. They call it liberalization, although it will lead to increased corruption".

But on the whole, said the Kosht Uradu project manager, the collected measures do not seem to have anything to do with restructuring the economy, with an understanding of the long-term prospects - local reactions to local problems.

"Treating Cancer with Aspirin".

Uladzimir Kavalkin stressed that the problems in the economy are all about Lukashenka, who "unleashed a war against his own people and continues to carry out repression, and he gets sanctions for it.

"And he gets even more sanctions because he is Putin's accomplice in the aggression against Ukraine. This is the reason," the expert said.

At the same time, the economist compared the actions of the Ministry of Economy to attempts to "treat cancer with aspirin". According to him, those things, which can be influenced by the ministry, do not solve the root of the problems, which are associated with what Lukashenka is doing.

"All of these small simplifications of procedures, small opportunities to support exports, which have substantially declined, are good at the stage when the economy has been growing and not growing anymore. These measures can somehow encourage economic activity. But in our situation, they are too little too late," concludes Uladzimir Kavalkin.