Stanislau Bahdankevich: Prakapovich gets into new debts

The Belarusian Deputy PM applies for a loan that will be paid at the expense of taxes of Belarusians.

Stanislau Bahdankevich, a former chief of the National Bank of Belarus, spoke to charter97.org about Piotr Prakapovich's proposal to Vnesheconombank to finance integration projects of Belarusian and Russian companies.

“Piotr Prakapovich wants to get into new debts. Taking new loans is possible, but they must bring income. If a loan for 'modernisation' is asked not by the company but by Prakapovich on behalf of the government, it means that the 'modernisation' project is bad. In this case guarantees from the Belarusian budget are needed. This situation looks doubtful for me,” the economist noted.

The expert stressed that modernisation should be carried out only at the companies which products sell well and can compete. Modernisation will boost their competitive ability.

“If their products cannot be sold and have to be stored in warehouses, the 'modernisation' is not needed. In this case a new plant manufacturing other kinds of products must be built,” the expert thinks.

He added that the banking system didn't have a problem of money.

“There are problems of cost efficiency. Banks will find resources. This is not a problem. But they should examine the company's business plan on modernisation to assure that its products will be sold in Russian and European markets; the products will be cheap and have a high quality; and the plant's productivity will be high. Maybe the plant has debts and keeps large amounts of finished products in warehouses. In this case they mustn't receive a loan. Or a loan can be granted on the guarantees of the budget, the government and Prakapovich personally. In this case the government will have to pay the debts from taxes,” Stanislau Bahdankevich said.

The Belarusian authorities expect Russian Vnesheconombank to increase investments in integration projects of Belarusian and Russian companies.