Storyteller Prakapovich

The authorities have lost the last rags of decency. Yesterday the chairman of the National Bank of Belarus Pyotr Prakapovich again scandalized Belarusians by the fantastic nature of the official statistic data. The chief banker of the country told without a trace of embarrassment that in January-September this year inflation reached 5.4%, or 0.6% a month. The question arises: maybe Prakapovich receives all food from a closed distribution network of the Soviet type, where all items in short supply were extremely cheap? What other explanation could be for his not knowing that prices for milk and meat have grown by 40% over these years (even Prime Minister Sidorski has admitted that). We are paying by 23.1% more for electricity and by 23% more for gas now. The utilities bills have gone up by 10.1%, public transport services by 15.1 per cent, taxi costs have grown by 20%, butter has become more expensive by 80%, and vegetable oil price has grown twice!

Where does the National Bank receive unrealistic figures from? A well-known economist Leanid Zlotnikau answers this question of the Charter’97 press center:

“There is a certain method of prices analysis, which gives such figures of inflation rate. And there is a special nature of calculation. The Ministry of Statistics (MS) has a consumer goods and services basket consisting of 350 items. But the trick is what does this basket include? For instance, the Economy Ministry publishes a monthly digest “Prices at consumer markets in Belarus”. This digest shows you that beef price was about Br 7500, and pork about 7500 as well. As a consumer you go to shops or markets and are sure not to buy foodstuffs at this price. And the consumer goods basket of Statistics Ministry consists of such goods only. They are so called socially significant goods. And the state monitors their prices. You will find such meat in any shop, as there is a control to have such cheap meat. And price growth for many goods is not important. It is more important for them to have these cheap food,” the economists reveales the secret of forming a consumer goods basket in Belarus.

So, only very poor people can live according to Ministry of Statistics’s rules. “The people, who buy low-fat milk in polythene bags, popular sorts of bread, the prices on which are regulated more or less, people who wear very chip clothes. But if buy normal clothes, one can’t find anything chip. The majority of people don’t buy lard with bones, skin and tendons instead of meat. MS counts only the products with low quality”, - Zlotnikau says.

The economist thinks there are “many tricks” in the calculations of Statistics Ministry:

“There are many tricks, many niceties. There exists a certain methodology and they follow it. The MS officials admit they need to have retail price index to reflect the real situation. If taking the whole spectrum of goods for all layers of population, we receive: don’t believe your eyes, as there is a wild difference…”, the expert says.

The official statistic is likely to give the wrong data not only on inflation rate, but also on GDP growth and other indexes?

“GDP index is working only for market economy. It has such a peculiarity: it should show how the population incomes are changing. We rate GDP by productive method. It means if the goods remain on stock – it doesn’t matter. And then, is it a real GDP? For example, two cars smashed up. And then they were repaired. The scope of the repair will be included into GDP. If to relay the pipes, which are rusting and braking down in great amount, or if the whole city was paved with expensive materials, - all these will also be included into GDP. In such a way we get GDP. From the things the state spends, the population spends, the enterprises spend on reconstruction and modernization. Though, if we construct for instance, many roads, palaces, pave a lot, - it doesn’t mean that a part consuming by the population is growing”, - the expert notes.

According to Zlotnikau, if the economy isn’t reformed, Belarusian will face further price hike – in two or three times.

“My forecast is that prices will increase. About 10 years ago I wrote that if we have protection, ineffective production, and if the resource prices increase, the food prices will also grow. Because of the ineffective production. It is an elementary forecast. When the food prices are 2-3 times as much as in the neighbouring countries, people will understand we have ineffective production. And if now not everything has become two times expensive, then it will be so soon. It is that I understand long time ago”, - the economist said.

Don’t tell us fairytales, Mr. Prakapovich! Or you are buying food only from your basket for the poor?