Stanislau Bahdankievich: Under Putin Russia and Belarus will see recession

Aggression against Ukraine is a prospect of lagging behind for Moscow and its allies.

Such an opinion came from the former head of the National Bank of Belarus Stanislau Bahdankievich as he gave an interview to the ucpb.org and analyzed the current state of Belarus’ economy, Belarus-Russia relations and the country’s prospects.

- When we speak of the Belarusian national currency’s creeping devaluation, if fact we are speaking of creeping deterioration of the finance and economy. This means a drop in gross product, industrial output volumes, agriculture, freight turnover, growing inflation, - Stanislau Bahdankievich says, - The chairwoman of the National Bank Nadzieja Jermakova already admits that this year the inflation will account not for 11%, as planned, but 16-17%. But in reality it will be about 30%. Especially in terms of staple commodities.

- Many are speaking now of the collapse of the national currency after the hockey championship…

- I think, there are no grounds for that. But if Lukashenka quarrels with Russia and they stop giving subsidies for Belarus’ economy, there will be a sharp deterioration.

- How great is the possibility?

- I think, Lukashenka will give up his position, give up Belarus and will sign the Eurasian Union agreement. Although recently he claimed he would only agree to a union without withdrawals and limitations. This means 3-4 billion dollars. If Russia meets him half way and provides 3-4 billion, we will hold on for couple more years.

- How will the Russia-Ukraine conflict influence Belarus’ economy?

- It will have an indirect effect – via Russia. Our exports mainly go to Russia – over a half of the total exports and up to 95% in certain areas. Considering Russia’s recession, the drop in production volumes, devaluation and extraction of capital due to the events in Ukraine, they will be able to but our products. Then we will face a serious sales problem.

- In several years and in long-term the situation in Russia’s economy will be fast deteriorating. In the opinion of Western experts, this will be the effect of the sanctions, introduced today.

- They have an effect already. Not only the sanctions, introduced because of Ukraine, but also the situation in China, which, it seemed, could help Russia, keep the production volumes. There is a drop in economy growth rates taking place in China. That is why China reconsiders its economic policies, and already this year there will be a drop in the trade with China.

In the following years effects will come out of what Putin has done. I think, that the sanctions affect Europe too, but in the course of the coming 10 years Russia will be losing technologically, technically. The situation will be deteriorating. In terms of productivity, consumer goods provision. Today Russian imports 50-60% of food staff. Ukraine used to export a lot. This problem will be aggravating. That is why the aggression against Ukraine is a prospect for a recession and lagging behind. They have to discoveries, outstanding Nobel Prize winners, new technologies. All the best is in the civilized world. I have been recently hearing that Russia gets expelled not only from political, but economic, scientific, financial, educational organizations. Russia is going into isolation. I think, if Russians topple Putin, the country will return to the civilized world, and there will be no great damage. But if Putin remains, Russia will see backwardness that the Soviet Union had.

- Considering Belarus’ links to Russia, this is what we will face too…

- And we too.