Lukashenko Reasons Lack of Foreign Currency in Belarus

President of Belarus Alexander Lukashenko considers the high degree of imports in the Belarusian economy as one of the main reasons for the lack of hard currency the country has faced with this year.

Thus, the head of state said at a seminar of executives of national and local government agencies on December 15 that import substitution should become a priority in the Belarusian economy.

"The strategic challenge for all of us is to reach the foreign trade surplus. Increasing exports and reducing foreign exchange costs by import substitution are the main ways to achieve the goal", BelTA quoted Alexander Lukashenko.

The president showed frustration that despite the record inflow of export earnings this year (more than $35 billion), there’s still a shortage of hard currency for imports. Ratio of imports to GDP is nearly 75% this year.

Alexander Lukashenko deems it necessary to reduce material and energy costs of production, since a large share of imports is represented by commodity and energy products.

The President also tasked the government agencies to determine what items are more profitable for Belarus to produce at home, and what shall be purchased abroad. According to the President, it is necessary to find the goods, the exports of which would compensate for imports.

Alexander Lukashenko criticized the regional state authorities for not taking import substitution as a "vital issue," having thereby failed to fulfill their objective to reduce the import-orientation of the economy and to reach a positive balance.

In late October, the president of Belarus said that 90% of the difficulties in the monetary sphere of Belarus had been triggered from outside. However, according to the head of state, the country’s open economy was unable to fully insure itself against external negative influences.

Addressing the faculty of the Tajik Technical University named after academician M. Osimi on October 29, Alexander Lukashenko declared about stabilizing economic situation in Belarus.

Meanwhile, international experts do not agree with the Belarusian leader, claiming that the economic crisis in the country is over. Thus, the Ministry of Finance of Russia believes that Belarus will be able to get out of the financial crisis by the end of 2012.

In turn, experts from the European Bank for Reconstruction and Development believe in even a more pessimistic scenario, predicting crisis burning out in Belarus. In October regional economic survey, published on October 18, the Bank downgraded growth forecast for the economy of Belarus for 2011-2012 due to the current balance of payments crisis of the country.