Past economic mistakes will be repeated in 2013
A detailed analysis of the approved economic forecast for 2013 allows for conclusions that the authorities have not learned from the Belarusian economy crises experiences in the last 4 years. In the medium term, without substantial external financial support, the existing social and economic model will suffer from a repetition of the past crises.
On September 25th, 2012 the President signed a Decree № 418 “The most important parameters of Belarus’ socio-economic development in 2013”.
Inflated and unrealistic plans and forecasts of socio-economic development in Belarus became the norm. Several parameters envisaged for implementation in 2012 have not been met and will not be met by the end of the year, despite assurances of their fulfillment.
Projected indicators for 2013 are comparable with the pre-devaluation period. Growth in 2013 at 108.5% is an unattainable goal, against 102.5% in 2012. The authorities anticipate achieving the forecast via increased domestic demand. In particular, there is a significant increase in housing construction plans – up to 6.5 million square meters. The population has an active role in financing housing construction. However, the population is not prepared to buy ready-made housing in such quantities, therefore concessional housing construction loans will be issued on emission basis.
Real incomes growth is planned to be achieved due to the rapid growth in labor productivity. However, 2012 data shows that incomes grow faster than labor productivity, and there are no reasons to believe the circumstances will change.
The planned increase in exports of goods and services is only feasible if there is a sharp increase in prices for Belarusian exported goods. And reasons behind such a forecast are unclear. Moreover, Foreign Ministry officials claim that this forecast is underestimated, that there is much greater potential for exports growth rate in value terms.
The outlook for FDI has failed this year in fact it has never been implemented since its introduction. It is only feasible to reach the FDI forecast (USD 4.5 billion) if there is mass privatization of state assets. And the authorities’ reluctance to give away control over state property implies that this task will be failed next year too.
Thus, the outlook for 2013 is a slightly modified economic development plan from the past, which has repeatedly resulted in crises. Some financial support from Russia, i.e. reduced energy prices will keep the Belarusian socio-economic model afloat for a little longer than in previous years. Since no lessons have been learned from the past crises, crisis is likely to repeat, because there is a disparity between plans and the real economic opportunities.
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.