Trying to achieve the impossible economic performance, the government might have the economic situation deteriorating

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April 22, 2016 18:29

On April 23rd, the Council of Ministers Presidium summed up the socio-economic development performance in Q1 2013.

The original GDP growth plan has been overestimated and is not implemented. The economic situation, despite the GDP growth by 3.5%, is qualitatively worse. Administrative measures used to stimulate the GDP growth had only short-term impact, deteriorating the situation in the medium term.

In Q1 2013 GDP growth was 3.5%. The original GDP growth plan for 2013 at 8.5% was overestimated, as the economic performance shows. In Q2 2013 the economic growth will continue declining due to high baseline of 2012, when Belarus was carrying out innovative schemes.

The desire to fulfill the GDP growth forecast without taking into account the international economic situation has resulted in deterioration of quality indicators. In Q1 2013 the stocks were piling up and increased by more than BYR 10 trillion, already exceeding the growth for entire 2012. In addition, the actual volume of stocks is clearly understated, because part of the goods are shipped to dealer warehouses in Russia and do not show up in the statistics.

Accounts payable in March 2012 to February 2013 have increased by 33%, receivables - up to 40%. The share of overdue payments in the total amount of existing debt has increased. During the year foreign receivables increased by USD 1.5 billion, which implies there are problems with export sales. Net economic output in January-February 2013 decreased by 34.3%compared with the same period in 2012.

Methodological amendments to the economic indicators’ calculation made in 2013 enabled to show economic improvements, but their impact will be limited in time. Effects from increases in net taxes on products on GDP growth in January 2013 were 3.8 percentage points, but in Q1 2013 the GDP growth slowed down to 1.7 percentage points with a clear further downward trend. The growth of investment in fixed assets was due to the changes in the accounting methodology for construction and installation works and has local impact. The distortion of statistical data results in loss of understanding about the real state of affairs in the economy and prevents the ability to implement urgent measures to remedy the situation.

Thus, the desire to achieve the impossible economic performance by any means results in economic imbalances and deteriorates the quality indicators for both, individual companies and large industries. Nevertheless, the government will continue stimulating the economic growth, provoking economic crisis in the medium term.

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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.

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