During its visit to Minsk, the IMF representatives have urged the Belarusian authorities to cancel the tax on ‘social parasitism’, not to chase the coveted $ 500 of the average wage, to reorganize the public sector and to suspend the support of unprofitable enterprises.
Loss-making enterprises annually receive more than 2% of the country’s gross domestic product.
Independent Belarusian economists believe that Belarusins will not be able to withstand the severity of the reforms which would for sure lead to the fall in living standards. However, they also believve that the situation can only get worse in the future.
The official Minsk has been only willing to increase utility tariffs. Full compensation of the payments by the public has been on the agenda for several years now, but the changes will take place already in two months. The only thing Belarusians will not cover fully will be the cost of heating.
“If the Belarusian authorities do not take additional steps, the medium-term economic growth will be capped at 2% per year. And Belarus will remain vulnerable to the shocks that will cause the disruption of the economy we have seen in previous years,” Peter Dolman from the IMF explained.
This is where the major difference between the vision of the IMF and the Belarusian authorities about the Belarusian economy lies. The Fund urges to reform the inefficient state-owned enterprises. The authorities, however, fear the disappearance of jobs. Althou no one can say, how many workers would be affected by the restructuring of the public sector. The IMF advises the decision makers to allocate 1 billion BYN to strengthen social protection and assistance to the unemployed. The official Minsk refuses even to abolish the tax on parasitism and only hopes to receive a new credit program.
Belarus intensified contacts with the IMF two years ago — just when it settled the debt of the first standby program. Last year, the country began talks about the next lending program for $ 3 billion.
Usevalad Shlykau, “Belsat”, photo: Vasily Fedosenko / Reuters / Forum