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 country “due 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.