Stanislau Bahdankevich: The minister who sets targets for state-owned plants must be tried

Belarus should reduce the issueing of loans to loss-making state-owned companies.

Professor Stanislau Bahdankevich, a former chief of the National Bank of Belarus, said it on September 2 at a meeting of the expert club of the United Civil Party “Well-being of Belarusian Ruble: Bed Rest or Intensive Therapy?” BelaPAN reports.

“I think the monetary policy carried out by chairman of the board of the National Bank Pavel Kalaur is largely right. This is right to control inflation instead of the exchange rate. We should pay less attention to the exchange rate, because it derives from the economy. The main task of the government now is macroeconomic stabilisation,” Bahdankevich said.

The expert thinks the state must carry “full responsibility for the inflation rate, interest rates on access to economic resources, forex reserves, which should be at least 12 billion dollars”. “The state must carry responsibility for the balance of payment deficit and keep it within 1-2%. This is the role of the state. It must stop interfering with business,” Bahdankevich said.

He added he found the current monetary policy right, but emphasised that restrictions on money supply could be stricter.

“When we participated in the round table discussion with Kalaur [the National Bank head met with independent experts in March], I tried to tell him: issuing loans to loss-making state-owned companies, the so called dead weight, must be restricted and the minister who orders plants to produce a certain number of tractors and trucks if they cannot be sold in the market must be tried. Money supply restrictions mean restrictions on issuing loans to economic dead weight,” Bahdankevich said.