Translated material
The end of a wonderful era
The Belarusian economic miracle is under threat
The energy conflict between Minsk and Moscow within a year could lead to a crisis in the economic model, and possibly also in political power in Belarus. Belarusian independent experts agree on this opinion, believing that the period of building the model in the country that Alexander Lukashenko once called market socialism has ended. Soon the country will be forced to carry out economic reforms.Over the past years, the Belarusian government has considered economic stability to be its main achievement . Local officials spoke of a Belarusian economic miracle and even used the term “European tiger” when comparing their country to fast-growing Asian economies. “ The notorious stability of the Belarusian economy was the stability of a drug addict who received a cheap drug. Today, society has returned to the situation in 1994, when, fearing reforms, it first elected Lukashenko as president,” Leonid Zaiko, head of the Belarusian analytical center “Strategy,” told Vremya Novostey. He emphasized that the successes of Belarus were associated with the supply of cheap Russian energy resources.
Today, Belarus' dependence on Russia remains significant . “Russia accounts for 48% of Belarusian trade turnover, including almost 100% of exports of food products produced in Belarus. The dependence on Russian energy supplies is almost complete,” notes independent Belarusian economist Yaroslav Romanchuk. According to his estimates, the gas contract signed two minutes before the new year, taking into account rising gas prices, increasing transit rates and the sale of Beltransgaz shares, will lead to losses of the Belarusian economy in the amount of $400 million. The damage from the change will be much more significant for Minsk conditions for the supply of Russian oil, which, depending on the outcome of the negotiations, will amount to from 2 to 4 billion dollars. A painful blow could be the introduction by Russia of measures to protect the domestic market from Belarusian goods. “An increase in oil and gas prices will affect the cost of Belarusian products, which will lead to a drop in GDP along the chain. Even under the most optimistic scenario, the growth of the “European tiger” will stop,” Alexander Potupa, head of the Belarusian Union of Entrepreneurs, told Vremya Novostei.
Experts consider the government's main mistake to be its refusal to carry out economic reforms. Former Minister of Foreign Economic Relations of Belarus Mikhail Marynich emphasized in an interview with Vremya Novostei: “The Belarusian leadership hoped that subsidies would be endless, and spent many years without reforming the economy.” “The government enjoyed the luxury of getting cheap oil and gas. Now a threat has appeared for him,” says former speaker of the Belarusian parliament Stanislav Shushkevich.
According to Leonid Zaiko, the Belarusian ruble may soon fall and the financial situation of enterprises will deteriorate. Alexander Potupa suggests that “the decline of the economy will lead to lower wages and a reduction in social programs.” According to Mikhail Marynich, all this “will seriously affect the position of the current government; it can be expected that within six months, voters’ dissatisfaction with its actions will increase.”
“The Belarusian model will collapse when problems with the trade and balance of payments begin, when the impossibility of fulfilling the budget becomes obvious and crisis phenomena increase. If the government fails to respond competently to the situation, this is quite likely,” says Yaroslav Romanchuk.