Stanislau Bahdankevich: This Government Should Resign

There are no factors in Belarus, which could promote even a minimum GDP growth now.

On April 28 the World Bank presented a renewed macroeconomic forecast on Belarus' economy. Experts expect a miserable growth of the Belarusian economy only in 2018, as for 2016 year it has even deteriorated.

Why has the forecast been deteriorated by the WB? Why does the Belarusian government put the future in bright colors despite dire forecasts?

Former head of the National Bank Stanislau Bahdankevich answered questions of EuroBelarus.

- In 2016 the Belarus' GDP may fall by 3%, although initially its drop was planned by 2.2%. What is the reason for such forecast deterioration?

- It is not a breakdown: last year the GDP lost 4 points, perhaps it will be less. The recession is coming and there is no revival. The first quarter faced losses: the situation deterioration in all sectors is observed. It looks like the World Bank has worsened the forecast amid all factors enumerated.

There are no reforms; there are no investments and sources to make the economy recover. The programme of socio-economic development of Belarus in 2016-2020 provides for the GDP growth by 10% in five years. The number is really low. It is likely to have such GDP growth within a year. Thus, both the government and the president stated they were not going to deal with Manilov things.

- But despite forecasts, an official Minsk hopes that the GDP growth of Belarus will make up 0.3% in 2016, and the inflation will not exceed 12%. What is the reason for such optimism?

- The government cannot but tell this. Good, fair power, which is not able to stabilize the situation, should resign. But the Belarusian government is not going to do this.

The first quarter of 2016 proved that the Belarusian economy had faced the recession. As a whole, the economy requires radical measures, confession that the main problem hides in the country. Just take a look: Poland and the Baltic countries are developing, even Ukraine had a 1% economic growth in the first quarter. Russia, our exports-imports partner, suffers the economic drop; if Russia has no easing of the situation, it cannot buy the Belarusian products, there is no other market for us. To find new markets we should have worked during previous 20 years. All mistakes of the current government turn out badly now.

- The World Bank believes that there is an acute need in foreign investments amid the necessity to pay $3.3 billion debt in 2016. What will happen if the Belarusian government does not find new credits?

- We will become poorer. I feel now the breath of poverty: prices for everything are getting higher. Pensions are not increasing, even the indexation is not being implemented. Even the inflation is not adjusted according to index!

the country will be able to cover the external debt. The National Bank will buy currency in the Stock and Exchange Market to cover the debt. The currency rate will drop, the import price, including raw materials, details will increase, there will be more losses. But the country will survive.

We will face poverty. I had a call from Brest region, journalists inform that the wage has allegedly increased by Br460 thousand. How it is possible, if less production has been produced? This is a contradiction. If I made two chairs last year and only one this year, what is the reason to pay more? The statistics is wrong.

- The WB believes that structural reforms may improve Belarus' perspectives in a mid-term period. Are there any signs of reforms?

- Lukashenka stated that the country would not change the structure, it would develop an ineffective one. Lukashenka will not allow any reforms. This is one of reasons why the IMF does not want to give credit to Belarus. Credits are needed to cover an external debt: $3 billion credit acquired and we are able to pay it. Citizens will cover debts, if external ones are settled.

The economy needs other measures: cutting of taxes, structural reconstruction. There is a need to stop interference into small- and mid-size business, it may start a new production with minimum resources. Market structure is the only way to develop the economy. Lukashenka has been banging the table with fist for long, but nobody is listening.

- Does this mean that the economy growth of 0.3% is hardly possible without structural reforms?

- It is hard to say. I always think about the government much better than it deserves. I hope it will not sit idle. The government should let the business take its own way and stop this practice of new taxes and duties. If it is not done then there will be no growth: the country will face the drop in production like it happened last year (2-3%). There are no factors in Belarus, which could promote even a minimum GDP growth now.