Leanid Zlotnikau: Belarus continues building financial pyramid
10:16, — Economics
The external debt of Belarus continues to grow despite the government's assurances of economic stability.
The external debt increased by 5,358.3 million dollars last year. As of January 1, 2014, Belarus owed $39 billion. Economist Leanid Zlotnikau speaks about the danger of the growing external debt for the country's economy and citizens, belnovosti.by reports.
“The debt I am speaking about is the gross external debt. It includes the government debt and liabilities of economic entities,” the specialist says.
Leanid Zlotnikau turns attention to the fact that loans Belarus takes are meant both for consumption and investments.
“We spend 33% of GDP on investments. It is one of the largest figures in the world, but we don't have the expected return. Wood processing and agriculture are good examples,” Zlotnikau says. “40 billion dollars have been invested in the agricultural sector over the last 20 years, but you see the result. So, all loans are spent on food.”
The expert explains how the current model of financing looks like.
“Today we take loans to pay the debts we had taken earlier. Belarusians have to pay for what they ate yesterday and what we are eating today. We'll continue building the financial pyramid until we stop borrowing money to pay other creditor,” the economist thinks.