Dzmitry Kruk: No reforms are planned; we will continue slowly immersing into poverty

There won’t be pictures with crowds of unemployed and food coupons; however, without changing the economic model the life of Belarusans won’t be improved.

Reforms or at least an approximate plan of changes of the Belarusan economy were expected right after the presidential elections, all the more that their need and inevitability was stated not only by independent experts and analysts, but also by high-ranked officials.

A month after the elections it was announced that there would be no reforms. Both at the October Economic Forum and at the Entrepreneurs Week that is going on now the necessity of reforms is stated but the reforms are exempt from discussion. The future denomination that is to come in July cannot be really named a reform.

According to Dzmitry Kruk, a research officer at the Belarusian Economic Research and Outreach Center (BEROC), one of the latest addresses made by the officials suggest that “the situation when mild changes in the economy go on without creating a critical mass, is convenient for everyone in the country”. For example, if we analyze the speech by Kiryl Rudy, the presidential assistant, we should have understood that already at the KEF (Kastrychnitski Economic Forum – EuroBelarus): “Don’t expect some quick reforms or that something that happened before in other countries is going to happen in Belarus”. “When will this “systemic mass” accumulate? It can take decades, - noted Dzmitry Kruk in the talk with the “EuroBelarus” Information Service. – I.e. I see no quick changes, and messages on the part of the authorities can be interpreted as a signal: “We continue living according to the former economic model”.

If we consider the money Belarus expects in the form of loans from the International Monetary Fund and the Eurasian Development Bank (which makes approximately $7 billion altogether) that Belarus will get as a stimulus for reforms, then Belarus will manage to survive without reforms (even if with difficulties): “Well, in the previous years we had a problem; the authorities wanted to avert the financial crisis, but today the actuality of the financial crisis in Belarus is not that high. The only thing that can be relatively topical in the near future is the problem of paying off debts of 2016-2017; in 2016 we have to pay off at least $3.3 billion, though, I believe, the state will find the opportunity to refund it or at least to maintain it at the expense of the current account. Otherwise money is not that critical now as they used to be, for instance, in 2010, when they were needed for supporting the exchange rate”.

The expert believes that “pay-off for rejection of reforms will not be some momentary crisis, but slowdown and further GDP fall and economic stagnation”. “I see no prerequisites for some united moment of fall as it used to be in 2011 unless the problem of default on state debt appears. Otherwise, I would call it a slow immersion into poverty, - emphasizes Dzmitry Kruk. – According to my calculation, we started sinking in some unknown trap from 2007; starting from 2009 it became obvious. Many people in Belarus, authorities in particular, have the picture from the 90s in their heads – a crisis with food coupons and crowds of unemployed in the streets… We won’t have such crisis in Belarus now; we are not living in the 90s anymore. We will have to wait for such picture for 20-30 years”.

If during the KEF Kiryl Rudy, the presidential assistant, named five reasons why Belarus won’t have reforms, at the opening ceremony of the 5^th Global Entrepreneurship Week on November 16 Uladzimir Zinouski named three priorities of the Belarusan model, the main aim of which for five years is to “strengthen competitiveness of economy for the growth of well-being and providing economic independence and social justice”.

First priority: ensuring effective employment and development of human capital.

Second priority: growth and intensification of export of commodities and services ensuring a balanced foreign trade.

Third priority: investment activity and productivity growth.

“In the five years we should create a society, for which innovations and initiative is normal”, - the Minister stated with over-optimism, considering the fall of basically all key economic indicators this year.