Stanislau Bahdankevich: We need comprehensive economic reforms to stop economic downfall

In January-October foreign exchange earnings declined by $9 billion compared to the same period last year. The former head of the National Bank explains the reasons and consequences of this process.

– Economists explain decrease of export income by the decline in the demand for Belarusian goods in Russia, and the reduction of income from domestic currency trade – by the policy of the National Bank of de-dollarization of the economy. What's the reason for that, in your opinion?

– The main reason is sales slump in foreign markets. This is not a question of the last few months, but of the whole year. We have a constant decline in exports and, as the evidence of the lack of competitiveness of the Belarusian economy. At the same time, according to statistics, the balance of foreign trade turnover, including exports of goods and services, remains positive, so the decline in revenues does not have such a strong influence, for example, on the national currency rate, as it could have.

– Nevertheless, the situation is getting worse. What are the consequences of the reduction of foreign exchange earnings?

– The consequences are already visible. They are the decline of gross domestic product, the level of income of the population, deprecation of salaries, deprecation of the national currency and inflation. That what has been happening since the beginning of the year and is lasting today.

– How do you see a way out of this situation?

– Conducting comprehensive economic reforms could be a way out. That means the revival of the economy, without which it is impossible to reduce the amount of taxation. That is the improvement in the climate for foreign direct investments with new technologies, new equipment. That’s everything that has been suggested by the United Civil Party in its program “One million new jobs” and other anti-crisis programs. They include a whole range of reforms, which are impossible without changes in the field of public administration and political sphere, starting with holding free fair elections, competitive election or appointment of officials, including the directors of enterprises, employees of ministries and departments. That means openness and transparency of government activities, openness of information on the budget, where does the money from country’s loans are spent. This is the change in the pattern of economic and political development of the country.

The interview was originally published at ucpb.org