Government searches for "loopholes" to keep unprofitable enterprises and sectors
Alexander Lukashenko’s Decree No 170 of 22 April 2011 has legalized the scheme of circumvention of the requirements set by the international donors to stop loans and state support to the economy via emission.
“From 1 April 2011 to 31 December 2012 banks are proposed to suspend repayment of principal loans by organizations authorized to make procurement of modern agricultural machinery and equipment for supplying it to agro-industrial organizations on long-term lease (leasing)...”, reads the text of the document.
In the past, during the autumn-spring period the agricultural works and other needs of enterprises and sectors were supported via the NBoB emission (soft loans, etc., often new loans were issued to pay off old debts), now, instead of printing new money, the scheme envisages prolongation of the repayment period for old debts.
The amount of accumulated agricultural debt in Belarus is huge (Br 1.6 trillion in 2008, Br 2.62 trillion in 2009, Br 3.2 trillion in 2010, i.e. a total of Br 7.3 trillion, or USD 2.4 billion at the official exchange rate). The amount of accumulated agricultural debt in Belarus is huge (Br 1.6 trillion in 2008, Br 2.62 trillion in 2009, Br 3.2 trillion in 2010, i.e. a total of Br 7.3 trillion, or USD 2.4 billion at the official exchange rate).As a result, regardless of some tightening of monetary policy and declarations of renunciation of the policy of state support to rural and other sectors (except for social projects), de facto, the Belarusian authorities are not ready to refuse support to the inefficient producers, primarily in the rural area.
The country's leadership has instructed the local authorities to raise minimum wages at enterprises by the end of 2019 to BYN 1,000, which would lead to an increase in the average wage in the economy as a whole to BYN 1 500. The pace of wage growth in 2017 is insufficient to ensure payroll at BYN 1000 by late 2017 without manipulating statistical indicators. In order to fulfil the president’s order, the government would have to increase budgetary expenditures on wages in healthcare and education, enterprises – to carry out further layoffs and expand the practice of taking loans to pay wages and restrict investment in modernisation of fixed assets. In 2010, the artificial increase in wages led to a threefold devaluation in 2011, an increase in the average salary to BYN 1500 will not match the capabilities of the economy and would lead to yet another devaluation.