‘The situation is controllable but requires certain decisions’
The major news is that a further strategy of action on the currency market is soon to be announced. According to the President, the matter cannot be delayed any longer. He has called upon the Government and the National Bank to be guided by objective economic laws, avoiding populism. Meanwhile, Mr. Lukashenko has stressed that the state should use every avenue to offer social support to citizens. Pensions, scholarships and salaries are to be indexed to the rate of inflation.
The President has also highlighted the high dynamics of GDP growth — up 9.8 percent between January and July 2011. In addition, record export figures have been registered, exceeding $20bn over the first seven months of the year. However, as Mr. Lukashenko notes, these figures do not solve the major problem: reducing the negative foreign trade balance. As recent data shows, this stands at minus $4.5bn.
The President expects the Government and the National Bank to present definite proposals on how to strengthen the currency market. According to Mr. Lukashenko, at present, the market ‘has been stabilised at a level which is unacceptable to us’. “We need to reach a normal level of currency market operation,” he stressed.
The Government and the National Bank have been asked to elaborate all possible variants under the present situation. Mr. Lukashenko noted, “All our decisions must rely on objective economic laws that work regardless of what we might want or not want. No populism can be accepted.”
The situation on the consumer market has become another topic. The President states that, as he is being informed, the outflow of domestic products to Russia is gradually reducing. However, he has warned officials to abstain from clumsy administrative measures. He has also criticised the idea of sending police officers and border guards to the border to prevent the export of Belarusian produce. “Only economic methods are workable. We share a single economic space with the Russian Federation and the Ukrainian border is not locked either. We have an open economy. If we close it today, to anyone, they’ll close theirs to us tomorrow,” he has stressed.
The third problem tackled by the session was the growth in prices. The President noted, “It’s necessary to study whether local authorities and heads of certain enterprises are to blame for following a policy of all-permissiveness, hiding behind the disparity of prices between Belarus and the Russian Federation.” Clearly, the major reasons for the sharp growth in prices are objective. Mr. Lukashenko stressed that the issue is not prices but how they correlate to citizens’ incomes. He explained, “We need to create conditions whereby someone coming into a job can earn enough to support their family.” He added that additional measures regarding social protection will be taken, with incomes are to be raised to the level of price growth.
“Although we’re being criticised for increasing pensions and indexing salaries, we’ll stick to this policy,” he added.
Mr. Lukashenko focused on another issue very much on the minds of Belarusians: the future of banking deposits. He noted that rumours of accounts being frozen are being ‘spread by those who wish to sow panic among the population’. He announced that he has prohibited the Government and the National Bank from taking such measures, warning, “The freezing of deposits is unacceptable!”
Summing up the results of the session, Mr. Lukashenko asked the Government and the National Bank to finalise their proposals jointly with experts, uniting them in a single document for submission to the President in the near future. “I shall personally announce how the Government and the National Bank are to behave under these conditions. We have 1.5-2 months to stabilise the foreign currency market. That’s all! We don’t need people to listen and choose whether to trust us or not. We need them to feel that the policy which has been previously determined will be continued and that the situation will develop along the path chosen by the President,” he said.
The Government and the National Bank have been asked to conduct regular briefings, informing the public of their actions. “Nothing should be kept secret — even if it’s not pleasant,” Mr. Lukashenko stressed.