Siarhei Chaly: The task of export rise contradicts that of improvement of well-being

The desire of Belarusan government to keep to the free exchange rate in 2013 is quite realistic and is unlikely to meet any confrontation from the President of the country.

 This opinion was expressed by the economist Siarhei Chaly to the EuroBelarus Information Service.

He pointed out that Aliaksandr Lukashenka, the President of the country, during one of his latest reports on exchange market provided by the governor of National Bank Nadezhda Ermakova “stated that floating rate of exchange is almost the thing we promised to people and thus had to be observed.” “It means that market exchange rate formation mechanism is understood by the authorities as some political policy and not like a technocratic moment. So it is unlikely that they will abandon it”, –noted the expert.

He emphasized that ruble market rate recession is “absolutely counterproductive”, as it is almost the only tool with the help of which the fight against last economic decline came to be successful.  “The more so because the floating rate is a market way to provide the solution of the preservation of gold and foreign currency reserves problem”, - pointed out the interlocutor.

 Of course, the implementation of a tough monetary and credit policy will not let the authorities “organize political handout of prizes in the form of pre-election pay rises and so on.” “Because even that slight growth we witnessed this year has put the pressure on the exchange market. It was seen in September-October of this year”, - noted Siarhei Chaly.

 According to him, it is the negative experience of the last two months when the authorities had to extinguish the currency panic that will help to refrain from a thoughtless pay rise.

 Besides, the promised level of 500 dollars is almost achieved, and according to the words of Aliaksandr Lukashenka this is the last number after which the authorities will not raise wages forcefully.

Siarhei Chaly believes that it was the very September-October negative experience that compelled the authorities to seriously consider export as one of top-priority indices. Let us recall that according to the decree of the Council of Ministers a special Council on export development was established.

“Such attention to export is a reaction on tense situation that appeared on the monetary and exchange markets during the last 2 months, when rate of interest has risen sharply and speculative games against the ruble have started”,-  said the interlocutor of EuroBelarus.

According to him the main concern was not so much the export itself as the income of currency to the country. This is proved by the President’s call to return the currency earnings into the country. “Obviously there were some negative trends to create currency speculative positions reckoning its potential growth with regard to the Belarusan ruble,” - Siarhei Chaly assumes.

However, he doesn’t believe in veracity of the authorities’ forecast when it comes to the increase of exports next year.  “Because the forecasts of all of the expert institutes (International Monetary Fund, the North Bank, Ministry of economic development and trade of the Russian Federation) show that our main foreign economic contractors will be growing by 3,5-4% at best next year. And sure, there is no chance for the expected 15% of the increase of exports to emerge. And it is clear that there will be no economic growth in 15%; it will be of about 3 times as low,”- reckons the economist.

He notes that the only way to stimulate external demand is an artificial constraint of the domestic one. And it was asserted by our economic authorities more than once. This is proved by the last year experience, when steep downfall of the purchasing power led to the 65% rise in export production.

“Notably it means that the task of export rise contradicts the task of improvement of well-being. Thus, as soon as well-being goes beyond a certain level, import demand starts to rise and this in its turn leads to foreign trade statistics let-down”, - outlined the EuroBelarus interlocutor.

According to Siarhei Chaly, the year 2013 and 2012will be very much alike. The overall picture will look approximately like this: stagnation at the level of 2,5-3% of economic growth, nearly even growth in exports and current account deficit in 2-3 million dollars. “And this hole just won’t be covered by any administrative or market measures”, - Siarhei Chaly pointed out.