The Departmental Head at the BSU’s School of Business and Management of Technology, Candidate of Economic Sciences Georgy Grits, believes that ripples from the recent global crisis continue to be felt, with no end in sight. “The latest relapse was not unexpected and there’s no reason to believe that everything will be resolved anytime soon,” he explains. He notes that two paths lay before us: continuing in the old fashion (halving profits); or the preservation of incomes by doubling efforts.
European experts are now gaining a clear understanding that the WTO, in its former form, is no longer a capable instrument for regulating the global economy. Previously, the international organisation simply needed to co-ordinate its position with the USA. However, new strong players have emerged — such as China and India. Even within the framework of the European Union, countries with different levels of economic development — such as Germany and Greece — cannot be guided by common rules of foreign trade. With this in mind, a shift to bilateralism within the WTO has become apparent recently.
Of course, Belarus is dependant on global economic processes, asserts Mr. Grits. The Dollar is among the basic currencies in gold and currency reserves while many foreign trade contracts use it — including those relating to gas and oil. Additionally, our major trading partners are also likely to be affected by an economic ‘shake’. Europe, Russia and China keep a large share of their gold and currency reserves in Dollars while their own securities are nominated in this currency. In particular, China can lose dozens of billions of Dollars overnight if even minor fluctuations occur on the currency market. There is no talk of increasing assets, as their stability is questionable.
Speaking about Belarus’ measures, Mr. Grits notes, “We need to form our economy, taking into consideration our own strengths. Naturally, it’s unwise to pretend to a certain role on a global scale. However, with our partners, we’ve established the Customs Union and are now building a Single Economic Space. To some extent, these associations follow some WTO rules. However, they can protect themselves from crisis without using tariffs.”
He believes that Belarus’ future relies on the formation of strong regional partner co-operation. Moreover, a large raw material component has been formed within the Customs Union, while Europe needs resources. “We should not forget that our economies are growing, even if this growth has slightly slowed down recently,” adds Mr. Grits. His is a more optimistic view, set against the sad prospects of global economic stagnation.