Updated at 19:48,25-10-2020

Bogdankevich: I see no structural reforms


"Economic policy, which is now carried out by Belarusian authorities, is justified, and it suggests that in the second part of the year the economic growth will be positiv, the head of the IMF mission Chris Jarvis thinks. “However, if the current policies are implemented, the GDP growth of 5% is unattainable".

Jarvis also said it was premature to reduce the refinancing rate, and he recommended not only to give up an overvalued rate of economic growth, but also to curb the rise in wages. The government, meanwhile, is optimistic, expecting in 2012 5.5% GDP growth with inflation at 19%, leaving urgent the task to rise incomes of the population.

Former head of the National Bank of Belarus Stanislav Bogdankevich commented to UDF.BY to the statements of the IMF mission’s head and the authorities' plans.

- I think that today, it is early to assess the economic program of the government. On the one hand, the right approaches are declared: the reduction of loan emissions, and non-deficit budgeta nd balance of foreign trade. In addition, the economy should be stimulated by the cheap gas and oil from Russia, good prices for other export goods of Belarus. But on the other – in order to improve the effectiveness, certain measures are missing:

1. There is no fundamental restructuring, which is why there are a lot of unprofitable and marginally profitable enterprises. According to official figures they are 48%. And I do not see any plan to solve this problem in the next couple of years.

2. There is no functional restructuring of the management of the economy, i.e, reducing bureaucracy apparatus. This means that there is no task to reduce government intervention in business, and administration remains the predominant method.

3. Issues of taxation for establishing the industry are not solved, especially for small and medium businesses.

So, on the one hand, the stated goals are correct, but on the other - they are clearly not enough.

- Some experts say in late spring can be another wave of financial crisis, and that in the beginning of the planting season the government will traditionally use the printing press. What do you think about this?

- I do not think there will be some kind of "wave". The crisis will be sluggish, and rise in prices will be gradual, not so dropping as in the last year. I doubt, the authorities stand tight loan and interest rate policy: the sowing campaign is coming, which will require support of the unprofitable enterprises’ production. Therefore, problems can arise even in conditions of huge Russian energy benefits, because to date the debts of the State and the National Bank has not been yet repaid, which is about $2 billion. And still there are same problems with sales ... And it's hard to say how the exchange rate will respond to all these. In short, there are many problems, and it’s hard to evaluate them today.

- What will happen, if Belarus does not meet the IMF terms and will not get a loan? What are the possible negative consequences for the economy of our country in this case? And whether they will have to find money somewhere else, not on such favorable terms?

- Belarus can solve the problems of external payments and avoid default and without the IMF. Yes, it will reduce the volume of reserves. But we received $500 million for nuclear power plant -the currency is there, one can use it. Also with all the requirements, I think Russia will take into account our full turn to the East and will provide about $ 1 billion from the fund of the Eurasian Economic Community. There are other sources. For example, the Russian banks, which come in Belarus: Promstroybank, Vnesheconombank and Gazprombank.

But I do not see the economy improve. We can live without loans for another year at the expense of Russian benefits on energy, but only if the government properly uses these benefits! It's about $ 3 billion! For example, it would be good to make technical and technological re-equipment of large state enterprises, to throw away the outworn-out equipment - and this is not done. Therefore, the indolent stagnation will continue. Which, in turn, will give the possibility to raise salaries, which lag behind not only from Poland and Baltic states, but also from Russia and Kazakhstan. And this is absolutely not normal in the Customs Union.

As Bogdankevich noted earlier and whatJarvis reminded aboout yesterday, even though the economic conditions are essential for the loan, but you can not ignore the political factor. After all, members of the IMF, with the most votes in decision-making -these are the countries that have criticizedBelarus for the situation of human rights and political freedoms.