Siarhey Chaly: government’s plan – another false pretences

Siarhey Chaly, a Belarusian economist, thinks that the governmental economic recovery plan presented on Saturday, was incoherent, written by a number of different institutions and simply “glued from separate pieces”.

Chaly drew attention to the fact that some of the proposed solution might actually bring positive results, but “that would be leveled by a whole set of non-market methods of fighting economic instability, such as freezing prices or command to sell foreign currencies”. Chaly stressed that the government plan does not include any structural transformations. – It also has very limited time frame – it focuses mostly on 2011, with an exception of such obvious recommendations as constant increase of export, which will probably stay only on paper – he told Belsat TV.

Chaly is concerned with a decision to compensate people’s wages after the ruble devaluation, which is his opinion can lead to escalation of inflation. He also thinks that the document is only meant to convince the IMF of Belarus good will and of Belarusian government’s active approach to the crisis. However, as it was stressed by Chaly, chances of an implementation of the plan are slim.

The plan was published just before the Saturday’s session in Kiev of the Anti-crisis Comittee of the Eurasian Economic Commonwealth, during which a decision was made to offer Belarus a $3 billion loan.

Media also informed, that the document predicts a broader use of the foreign currencies in Belarus – for example to pay taxes or duties. The discount on foreign currencies sold to certain economic entities will be cancelled. The excise tax on cigarettes and alcohol will be increased. Gas price will be “optimized” and rates of the electrical energy and thermal power will be “indexed”. Belarusian finance ministry is also planning to decrease budget deficit.

Belsat/Polish Radio (Polskie Radio)

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