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Insurgent People To Conduct Reforms In Belarus

Insurgent People To Conduct Reforms In Belarus

The economists have given an assessment of the authorities’ “reforming potential”.

Lukashenka has stated once again that he will hold on to the old forms of the socio-economic model and does not accept any aspects of the market economy, during the last press-conference.

Economists Barys Zhaliba and Leu Marholin have commented on the dictator’s speech in an interview to Radio Liberty.

- During the press-conference on November 17, Lukashenka has once again declared his attitude towards the communal services, the collective farms and the bankers, who “create nothing”. He has demonstrated the same views he had for the last 20 years. What does it mean for the perspectives of the Belarusian economy?

Marholin: This is a very bad situation for the Belarusian economy. However, nothing can be done, as Lukashenka does not change. We cannot count on the fact that tomorrow he will come to the idea to carry out drastic reforms. He can only do it under great duress. If the people rise to a very active, perhaps even radical action. Otherwise, he will continue to assume that everything is going well, and ideas are needed only for keeping what we already have.

- Can’t the pressure of the foreign creditors, or the bad situation in the economy with someone proving him it would only get worse without reforming, make him tend towards reforms?

Marholin: In this age, people change very rarely. This is his psychological state, he is used to it and will change something as a last resort. Secondly, he understands that if we introduce a market economy - it will entail political changes as well. After all, the real market blows up everything that binds it. He knows it, and so the reforms will go only as a last resort.

- Lukashenka has said bankers in Belarus earn too much and this issue needs handling.

Zhaliba: Lukashenka follows his way; he said many times there is no need for reforms, it’s better to “improve what we already have”.

We all know that the salaries in the banking sphere have always been relatively high, compared to the others. However, the situation there got worse as well, as they depend on the economic situation in the real sector. The GDP is falling, the industry and the agriculture are stagnating and they all are banks’ clients.

This reflects on the bankers’ salaries and on the banks’ financial state. The share of the so-called “troubled loans” has threateningly increased, up to 15%. This is a certain red line. The Belarusian banks have felt more vulnerable than before since long ago.

- Up to which line is Lukashenka going to deny the reality?

Marholin: Clearly, the only condition under which Lukashenka will hold real reforms is if he sees that the absence thereof provides more danger to his power than actual reforming.

What he said about the bankers is a clear illustration of Lukashenka’s “knowledge” about the economy. For him, manufacture, agriculture, construction – are real businesses. As for trade, or banks – he simply doesn’t understand their role in the economy. And a person tends to fear what they don’t understand. Therefore, only if it becomes obvious that the risk on non-holding the reforms is higher than the one of making them happen, something will be done.

- Still, Lukashenka knows nothing about computer technologies but provided good benefits to the Belarusian Hi-Tech Park…

Marholin: This is just the branch of the economy which least of all depends of the socio-economic order which prevails in the country now. Hi-Tech are not connected with labour force or production capacities, they do not require plants, lathes, equipment. The development of this sector provides no threat to Lukashenka’s power.

When they tell him about the necessity to increase communal tariffs, he reluctantly but agrees because this does not jeopardize his rule. However, when they say privatization or some unclear structural reforms – this is scary, he doesn’t want to do this.

Zhaliba: Lukashenka’s personality requires taking everything under control: he wants the money, the resources, large-scale centralization. This is why he dislikes any talks about privatization. He takes any changes in this authoritarian centralized system as a threat to the whole form of government.

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