Alexander Lukashenko ignores the lessons of the past and orders high growth rates in 2012

Category status:
April 22, 2016 18:00

The government has been forced to plan high growth rates in 2012 and to forget about the plans to stabilize the currency market. In 2012 the economy will be funded by emission once again. The lack of a new stabilization loan will set new tasks and challenges for the government and the National Bank.

Alexander Lukashenko tasked the government to achieve 5-5.5% of the GDP growth in 2012. Lukashenko said, “For those who do not agree or unable to fulfill this task we shall find another job. However after I sign this document, everyone should run around the country and say that it is possible, it is good, let’s start mobilization. Don’t you dare to talk to the media! God forbid I receive the opposite reports!” The new plan, envisaging 5.5% of the GDP growth, controlled prices and wages increases should be ready by mid-December.

Mr. Lukashenko has ignored the views and concerns of Deputy Prime Minister Rumas and his supporters in the government regarding the possible negative consequences for the economy (inflation, devaluation) with the GDP growth higher than 1-1.5%. In 2012 the economy will be funded by money emission once again.

De jure the parameters of the annual economic growth have not yet been approved, however one of the consequences of their announcement by the Government could be that the IMF Mission anticipated to visit Belarus on 12-16 December, will not come. The orders of the head of state imply that the economic policy of the country will resume stimulation of growth via emission.

The lack of a new stabilization loan will set new tasks and challenges for the government and the National Bank and it is unclear how they will be addressed, given the IMF loan in fact has already been incorporated into the basic development plan. Moreover, this amount significantly exceeds the amount of benefits to be received from the reduced gas price.

Also, wishful thinking of Lukashenka conflicts with the main priorities of the NBB monetary policy. In order to achieve 5% growth of the GDP the NBB will be forced to issue emission credits and to review its monetary policy priorities.

 

Similar articles

President ensures continuity of state administration with young middle-level personnel
October 02, 2017 12:08
Image: BRSM.BY

President Lukashenka continues to rotate staff and rejuvenate heads of departments and universities following new appointments in regional administrations. Apparently, new Information Minister Karliukevich could somewhat relax the state policy towards the independent media and introduce technological solutions for retaining control over Belarus’ information space. New rectors could strengthen the trend for soft Belarusization in the regions and tighten the disciplinary and ideological control over the student movement in the capital.

President Lukashenka has appointed new ministers of culture and information, the new rector of the Belarusian State University and heads of three universities, assistants in the Minsk and Vitebsk regions.

The new Information Minister Karliukevich is likely to avoid controversial initiatives similar to those former Minister Ananich was famous for, however, certainly within his capacities. Nevertheless, the appointment of Belarusian-speaking writer Karliukevich could be regarded as the state’s cautious attempt to relax environment in the media field and ensure the sovereignty of national media.

The Belarusian leadership has consolidated the trend for mild Belarusization by appointing a young historian and a ‘reasonable nationalist’, Duk as the rector at the Kuleshov State University in Mogilev. Meanwhile, while choosing the head of the Belarusian State University, the president apparently had in mind the strengthening of the ideological loyalty among the teaching staff and students at the main university in order to keep the youth movement at bay. Previously, Korol was the rector of the Kupala State University in Grodno, where he held purges among the disloyal teaching staff.

The trend for the renewal of mid-ranking executives and their rejuvenation has confirmed. The age of the Culture Minister and three new rectors varies from 39 to 44 years old.

Recent trends