Stanislau Bahdankevich: Entire branches of economy destroyed by authorities

Machinery-producing industry, manufacturing of TV-sets, agriculture have been almost destroyed.

Such an opinion has been voiced in an interview to charter97.org website by Stanislau Bahdankevich, the former chairman of the National Bank.

- Mr Bahdankevich, net purchase of foreign exchange has become 22 times as much in May. Why such a rise has taken place?

- Frankly speaking, this figure is quite surprising for me as well. But certainly, there is a tendency to buy exchange, and it is related to the economy which is not working. That’s why such a result has happened. And even the Ice Hockey World championship has not helped much in this context.

- How stable the foreign exchange market of Belarus is at the moment?

- I would not say that it is completely unstable, but gold and currency reserves are extremely insignificant indeed. They amount to less than 5.5 billion dollars, which is a little more than a monthly import, and their constant dwindling continues. If compared to the first four month of 2013, the minus is $3 billion, and it is a huge falldown of the reserves. But as long as Putin promised to give 2 billion dollars, these reserves are to be renewed somehow probably. But all that does not solve our problems naturally. I do not know why Lukashenka has cancelled “debriefing” in the government. That’s probably because he left to congratulate Poroshenko.

- Is such a sharp one-time growth of exchange purchase volume dangerous for economy?

- I do not judge by these figures, but by the figures of trade balance and balance of payments, as well as by gold and currency reserves. These are more fundamental indices of the state of economy. I do not see collapse so far, but I see a stable deterioration of the economic situation and standards of living. And this deterioration continues.

We witness that not only due to these statistics, but by the growth of stock in storage, and by the growth of unpaid good shipped for import. That is, the Belarusian authorities just want to get rid of these goods in their warehouses, no matter how. Besides, there is an absence of real growth of the GDP, labour efficiency and many other figures. In fact, entire branches of economy are being destroyed: manufacturers of electronics, for instance TV-sets, machinery-producing industry and even agriculture. And all that is happening despite of the fact that the state is carrying out huge injections from the budget, and offers unrecoverable loans, for instance, to the agriculture. Everything goes topsy-turvy.

And I came to believe that Lukashenka would change the model, and the program, and the team, but all of a sudden he went to Kyiv. And due to the fact that Russia gives additional loans without any programs for maintaining the status quo of this ineffective model, the economy continues its stagnation, and the money is going to be squandered and spent on consumption.