Friday 29 March 2024 | 00:50

Vital Marhelau: It’d be better to admit that we have devaluation than to continue living in agony

31.12.2014  |  Economy   |  Siarhei Kozhuhau, EuroBelarus,  
Vital Marhelau: It’d be better to admit that we have devaluation than to continue living in agony

Co-Chair of the Republican Confederation of Entrepreneurship assumes that it is better to admit devaluation and start living anew than to agonize and still go through it later with bigger losses.

The last ten days of 2014 brought a lot of unpleasant surprises both for the population and for the economic entities.

On December 20 a temporary 30% levy on purchasing foreign currency was introduced. Enterprises and banks were to pay the fee when purchasing foreign currency at the stock exchange, citizens as a fee when purchasing foreign currency in banks. On December 29 the fee was reduced to 20%.

On December 24 the leaders of business-community of Belarus appealed to the management of the countrydue to the aggravation of the economic situation with the economic entities caused by external factors”.

The letter sent to the government, the National Bank, President Administration and other state structures notes that “due to the introduction of a 30% levy on purchasing foreign currency and increase from 30% to 50% of its required sale and introduction of moratorium on increase in retail prices the terms of economic activity for the vast majority of commercial organizations have changed”.

The consequences of the recent decisions made by authorities in the sphere of financial regulation Viktar Marhelau, the Co-Chair of the Republican Confederation of Entrepreneurship, discussed in the interview with the “EuroBelarus” Information Service.

- Did the latest decisions of the authorities have strong influence on the work of the entrepreneurs in the sphere of currency control? Can we talk about some real losses?

- Those who work with import/export feel real losses; those who work inside the country with the imported goods feel potential losses, and that affects each and every entrepreneur to some degree.

- The latest decision to reduce the fee on purchasing foreign currency to 20% improves the situation and reduces losses for entrepreneurs?

- Only to a certain degree. In general, the situation now is unacceptable for the economic activity.

- What is more beneficial for the entrepreneurs: today’s measures taken by the government or momentary devaluation?

- You see, it is the current coordinate system that is unacceptable for entrepreneurs. It is unclear what kind of system we are in, whereas we would like to see our activity and value it at real indicators.

It is not because businessmen are greedy, but if the work of the entrepreneur is unprofitable he won’t survive for a long time. Such work is useless both for the entrepreneur himself and for the state.

That is why each entrepreneur should have slightly more income than expenses, and that is why we say that we need a coordinate system. When real exchange in too complicated and overloaded with taxes, we get too many expenses and, respectively, an entrepreneur can’t make both ends meet and makes a decision not to work in order to minimize losses. However, it won’t bring anyone profit, too.

- Can you agree with the statement that the current actions of the authorities are, actually, prolonged devaluation, which in the end will equal the one we can make in a day?

- I think that it is not devaluation yet. However, it is an attempt to lift all bans and see what to do next. For now these bans are worse than devaluation for economic entities.

- What is your own prognosis re developments at the exchange market?

- Anything can happen in our economy; it’s hard to make any forecasts. I would do the most favorable forecast, which means that we all understand that there are problems in Ukraine, in Russia, and at the world market, so we’d better admit that we have devaluation and start our lives anew than to agonize only to go through it later with bigger losses.

That is why we ask the government to announce devaluation starting from January 1.

We need to take prompt measures; otherwise most economic entities will go bankrupt, and that would be an unheard problem. People still can’t believe in the consequences that are already visible in the perspective.

- Why did the government dare to take these measures, as they must have forecasted that the consequences will be bad?

- It seems that the government didn’t think that the population would be buying so much foreign currency. The country ran out of cash, and the so-called “technical default” happened. That is why it had to introduce such tough measures, so that to change them to more balanced later on.

Other news section «Economy»

Leanid Zaika: Minsk decided to beat the Kremlin by Iranian oil
Leanid Zaika: Minsk decided to beat the Kremlin by Iranian oil
There are no strategic goals behind the purchase of Iranian oil, believes economist Leanid Zaika.
Stanislau Bagdankevich: The living standard will continue to fall in 2017, and possibly in 2018
Stanislau Bagdankevich: The living standard will continue to fall in 2017, and possibly in 2018
In 2017, Belarus will have to pay about $ 5 billion debts, which may affect the level of welfare negatively.
Leu Margolin: Industry cannot rise from its knees
Leu Margolin: Industry cannot rise from its knees
Although 30 percent of Belarusian enterprises can still be revived through urgent structural reforms.
Stanislau Bagdankevich: Next year will be harsh
Stanislau Bagdankevich: Next year will be harsh
Stagnation will continue in 2017, the standard of living will not rise, and the banking system may experience a crisis.
Andrei Yeliseyeu: Russia cannot impose quotas on the Belarusian dairy products supply
Andrei Yeliseyeu: Russia cannot impose quotas on the Belarusian dairy products supply
Belarus has already agreed to reduce the level of state support to agricultural producers in the framework of the Eurasian agreements.  
Leu Margolin: It is impossible to bring back the 500 dollars salary
Leu Margolin: It is impossible to bring back the 500 dollars salary
The authorities will start pressuring businesses to make them raise salaries.
Uladzimir Kavalkin: Drop in income? Salaries are finally becoming adequate to the economy state
Uladzimir Kavalkin: Drop in income? Salaries are finally becoming adequate to the economy state
Income may drop even a little bit more, but it will not be anything dramatic - within a few percent, expert believes.
Leu Marholin: In 2017, the probability of economic growth is close to zero
Leu Marholin: In 2017, the probability of economic growth is close to zero
In 2016, Belarusian authorities were expecting growth, too. However, the economy is going down.
EBRD will prepare five state companies for privatization
EBRD will prepare five state companies for privatization
The Belarusian government has invited the European Bank for Reconstruction and Development (EBRD) to prepare five large state-owned companies for privatization.
 Leu Marholin: We are heading full speed to the new nineties
 Leu Marholin: We are heading full speed to the new nineties
Regression of the Belarusian economy combined with the inertness of the government will make us recall the worst years.  
Uladzimir Kavalkin: Statistics on unemployment and real unemployment are poles apart in Belarus
Uladzimir Kavalkin: Statistics on unemployment and real unemployment are poles apart in Belarus
Officially, the unemployment in our country is reducing – if judging by the number of registrations at the labor exchange; however, the number of jobs doesn’t increase in the economy.
Leanid Zaika: Decline in prices on gas should lead to the reduction in utility costs
Leanid Zaika: Decline in prices on gas should lead to the reduction in utility costs
In the situation of cheaper prices on gas Lukashenka's decree on non-cash housing subsidies looks weird.
Point of view: Defence industry in Belarus evolved from helpless to a weighty branch of economy
Point of view: Defence industry in Belarus evolved from helpless to a weighty branch of economy
Recently Belarus State Military Industrial Committee announced that in the first half of 2016 its enterprises earned a net profit of $80m, thus over-fulfilling the assigned export plans by a quarter.
Leu Marholin: It looks like the Belarusian PM has got a fortuneteller
Leu Marholin: It looks like the Belarusian PM has got a fortuneteller
The fall of the economy will continue in 2016; we should hardly expect growth in 2017.
Why with the success abroad, Belarus’ agriculture keeps failing at home?
Why with the success abroad, Belarus’ agriculture keeps failing at home?
Poor economic conditions in the countryside, restrictions, unfair competition, inefficiency of state-owned agricultural enterprises also contribute to this ‘success story’, writes Aliaksandr Filipau.
Viktar Marhelau: We killed consumer demand inside the country
Viktar Marhelau: We killed consumer demand inside the country
In the situation of everyone’s impoverishment administrative procedures are now being perceived painfully.
Opinion: The question of what role China can play in Belarusian development remains open
Opinion: The question of what role China can play in Belarusian development remains open
On 20 June Lukashenka met with vice-chair and president of the Chinese CITIC Group Corporation Wang Jiong; it seems especially important in light of Lukashenka’s planned visit to China in September.
Lukashenka: Only lazy people don
Lukashenka: Only lazy people don't earn well in Belarus
All the conditions for everyone to be able to earn a decent salary have been enabled in Belarus, however, it is necessary to make some effort to get the money, assumes the president.
Leanid Zlotnikau: The government knows what to do with the economy, but will do nothing
Leanid Zlotnikau: The government knows what to do with the economy, but will do nothing
Belarus is losing currency earnings – in the 6 months of 2016 the country earned 3 billion less than in the same period in 2015. Instead of removing the causes of the flop the state relies on magic.
Russia
Russia's Rosatom agreed to replace reactor vessel at Belarus NPP
State Corporation Rosatom has agreed to replace reactor vessel at the Astravets NPP in Belarus.
Gintautas Mažeikis: The relation of political field and arena in the framework of information war

In his report, philosopher Gintautas Mažeikis discusses several concepts that have been a part of the European social and philosophical thought for quite a time.

“It is our big joint work”

It is impossible to change life in cities just in three years (the timeline of the “Agenda 50” campaign implementation). But changing the structure of relationships in local communities is possible.

Shhh! Belarus Wants You to Think It’s Turning Over a New Leaf

Minsk’s muddled media clampdown could jeopardize warming of relations with the West.

Mikhail Matskevich: How to create a local agenda and make it a problem solving tool

To achieve changes, you need to be interested in them and stop pinning all hopes on the state.