„I am increasingly concerned with the way our government works. I don’t want to make any judgments, but this government is not as good as the previous one” – Bielta news agency quoted the president.
The comment was made in reference to the cabinet session held on Tuesday, during which presidential representative Siarhey Tkachow criticized the government for their inefficiency in dealing with the growing inflation and was confronted by the deputy minister of economy- Aleksander Yaroshenka.
Yaroshenka, supported by the prime minister, stressed that inflation – reaching a level of 180% – was a result of printing worthless banknotes. What is more, according to the deputy minister estimates, the price of one dollar can go from 8.5 thousand rubles up to 22 thousands.
The prime minister Mikhail Miasnikovich defended his cabinet member adding that the government was forced to start major investments, such as building houses and farms, but no funds were assigned to those projects. In order to meet all the budgetary needs, the government will have to print additional 36 quintillions of rubles. In order to counteract money shortage, Yaroshenka proposed to cut funds for the governmental economic programs from 36 quintillions to 12 quintillions of rubles. Lukashenka called such idea unacceptable and accused his ministers of being influenced ideologically by some mysterious forces.
The president also announced he will subject prime minister’s behavior to a thorough analysis.
The alarmist comments by the deputy minister are a sign of division in the Belarusian cabinet, according to an independent economist Aleksander Syankievich. “One fraction insists on continuing with printing money in order to maintain the subsidies for the state companies, while the other fraction wants to go along with the IMF recommendations and limit amount of money in the economy” – observed Siankyevich.
Siankyevich remains skeptical of following strictly the neoliberal model recommended by the International Monetary Fund. – Many of the state companies are already in a critical situation. Economic problems are coupled by drastic ruble devaluation and increasing credit rates. Ensuring crediting and financial liquidity became increasingly difficult – said Siankyevich. This will push the state companies towards bankruptcy and result in a loss of well qualified labor force. He also thinks that many of the state officials is interested in such scenario, because they hope to be able to buy the bunrupt companies for close to nothing.
It is not safe to print money with no limitations either, as it can lead to a dramatic devaluation – noted Siankyevich. In his opinion, exceptional solutions are necessary now, but the authorities are not ready for them.
The split in the government leads to a halt of decision making process, thinks Leonid Zlotnikov – another Belarusian economist. „The government has not created a concrete program, and nothing was approved by the president.” – he told Belsat. Zlotnikov believes that alarmist prognosis made by the cabinet members are meant to be a warning against a high development level through state investments as imposed by the presidential administration.