Stanislau Bahdankevich: Enterprises working for warehouses should be stopped

Does Belarus need new credits if they are not spent on reforms, but only to redeem old debts?

Ex-Deputy of the National Bank Stanislau Bahdankevich and economist Barys Zhaliba answer questions of Radio Svaboda.

Again Belarus asks Russia for a credit. This time it is $3 billion. The first reaction of Russian officials proves that the credit is going to be granted. Minsk is also holding negotiations with the IMF hoping to get money there either. How much does Belarus need new credits? Is there no other way out for the economy?

"They are needed to redeem those previously received. New credits will not be spent on reforms in the economy. I believe it would be right, if there were developed programs for modernization of production facilities, and received resources directly through the issue of shares, along with the access to new markets. But, meanwhile, the State obtain credits to settle old debts or just spend them", Stanislau Bahdankevich says.

"Our economic model is as such that it cannot exist without refinancing. If we are not granted new credits, we will not be able to redeem the old ones. For three years already Belarus has had to redeem foreign credits equaled $4 billion annually. There is nothing left, but to stand with a begging bowl and ask, at the highest level, for more Russian money. It is not normal. The economic model must be self-sustainable. If to take credits, then they must be spent on modernization and investments", Barys Zhaliba believes.

In Belarus previous years were the "modernization" ones in a woodworking sphere. But It failed. It is not only the opinion of independent economists, but the fact excepted by the Belarusian leadership. There is a question - are there any prospects for modernization with a current economic policy? Perhaps, the modernization in such conditions is out of sense.

"There is one thing independent economists are solid in - structural reforms are the things to start with. It there any sense in new credits with no new program? What should it be spent for? I think new reforms should start with a shutdown of those enterprises working for warehouses. MAZ has multi-month stock of unsold vehicles and still continues to produce new one without any new sales market. Such production should be terminated for 6 months and the VIP-staff must develop a program for an enterprise modernization. Unemployment benefits should be immediately increased at least to $200", Stanislau Bahdankevich notes.

The economist emphasizes that current cuts at enterprises cannot be considered reforms.

It should be reminded that recently many enterprises have taken a short work week and employees have been forced to take unpaid leaves. Charter97.org has received complaints from such enterprises as Gomselmash, Osipovichi Automobile Units Plant, Svetlogorsk Ferro-Concrete Plant, Bobruisk Plant of Tractor Parts and Units, Mogilevtransmash, Strommashina, MTZ, Gomeldrev, Minsk Bearing Plant, Belarusian Railways, OAO Vitebsk products and others.