Dollar should cost 13,000 Belarusian rubles

Miasnikovich and the government continue doing unnecessary things.

Leanid Zaika spoke to charter97.org about the government's plans to reduce imports.

“The import cannot be reduced with administrative programmes. In theory, prices of similar goods in the international market should be lower than prices of Belarusian goods. Based on the scientific approach, we, unlike Argentina, can't produce beef cheaper than $1.5 per kilogramme. In this situation, only a physical barrier of customs officers, policemen and infantry divisions on the border can restrict the import. The World Trade Organization wants zero tariffs and free trade. The crucial mistake of the Belarusian government is that it fears competition. By the way, we cannot restrict the import because we have commitments within the Customs Union. The share of the import is set by the joint decision of Kazakhstan, Russia and Belarus,” the expert noted.

The economist is sure that “the government's headache was caused by mistakes in increasing salaries in Belarus”.

“GDP grew 1.1%, but salaries grew 18%. Buyer demand increased. People began to spend their money on more expensive imported goods. This macroeconomic mistake made the authorities artificially raise domestic demand. They admitted the mistake and promised to find a balance. Belarus has a small but very useful experience of the 2011 devaluation, when the purchasing power of the Belarusian ruble fell threefold. The positive trade balance appeared, and objective economic laws without leverage and pressure worked for 4 or 5 months. Exports exceeded imports,” the analyst added.

Leanid Zaika emphasised that the flows of export and import in a relatively closed economy are regulated by the exchange rate rather than by Miansikovich.

“The government does unnecessary things and wastes its time instead of adjusting the ruble rate. The gap between the current rate and the rate that should be is 36%. The dollar should cost 13,000 Belarusian rubles. I'd like to recommend all government members to study English, sell their government cars and use a bicycle in summer and public transport, which they should make free, in winter. I would cut the government staff by 15%. Some ministries, for example the ministry of economy, industry and trade, should be closed. No one will notice it, even wives of the ministers,” the head of the analytical centre Strategy thinks.

The government plans to implement a package of measures to reduce imports in 2014, the draft forecast for the country's economic development for 2014 says. The document hasn't been published yet.