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.

Stanislau Bagdankevich, the former head of the National Bank, summed up the economic results of the 2016 and outlined the prospects for 2017 in his interview with the "EuroBelarus" Information Service.

- The stability of the exchange rate throughout the year must be highlighted. Many economists believed that dollar exchange rate will cross the bar of twenty thousand BYR (two denominated rubles), but at the end of the year the dollar exchange rate is a little less than two Belarusian rubles. This is quite a good achievement.

But other factors are no cause for optimism. The gross domestic product decreased, money income and standard of living deteriorated, as well as labor productivity and exports fell. The health care system fails to function properly.

Administrative model of economic management has proved to be ineffective, but there are no reforms. On the positive side it can be noted that there are many professional, knowledgeable people among the mid-level government officials. But they cannot promote their views to those superior.

 The inefficient economic management system is maintained. Therefore, I believe that next year will be harsh: the stagnation will continue, the standard of living will not rise. Moreover, considering the problem of debt repayment, problems in the banking system should be expected.

- Is the banking system on the brink of a crisis?

- It is possible if the authorities do not take any action.  But the collapse can be prevented if the state gives power to a modern-minded officials and clerks. But even if common sense wins, the recession still continue, and taking into account the cyclical nature of economic development some revival may be seen only by the end of 2017.

- Aliaksandr Lukashenka has once again reminded of the necessity to raise the average salary to $ 500 in 2017. What will happen to the economy during the realization of this idea?

- I can only advise Lukashenka to speak not about 500-dollar salary but about a program to achieve $ 500 salary, labour productivity, how to stop manufacturing goods that cannot be sold above the prime cost, etc... The mere idea of $ 500 salary is absurd, and the goal is unattainable as there is no program for economic reforms.

Of course this standard can be achieved for a few months through emission but it will be immediately followed by a collapse.