"Shock Therapy" Acquires Force in Belarus

Financial crisis in Belarus aggravates. Food, articles of prime necessity and home appliances disappeared from shops. Huge queers could be seen near to cash machines.

Fall in the exchange rate of local currency in comparison with the American dollar extremely aggravated financial condition of Belarus. According to experts, situation continues to worsen every day. Only recently the Byelorussians, preparing for "hard times", bought up essential commodities: soap, salt, sugar, matches in the shops, now real panic reigns in the country. People sweep everything away from the shelves: home appliances, furniture, clothes and everything else that remains in the shops.

At the same time there's catastrophic lack of cash in the country including foreign currency. Long queers of people gather near cash machines. People try to take all savings away as there are rumors that soon banks will be forbidden to hand out more than a half-million in local currency monthly.

On May, 21^st deputy prime minister of Belarus Sergey Rumas assured that banks of the country hadn't enter and didn't intend to enter any restrictions on giving out of cash Belorussian roubles from cash machines. According to the vice-premier, information was confirmed by the heads of all largest banks of the country.

The government tries to calm population down spreading through mass-media information that there are no problems with foodstuffs and there will be no price increase in the near future. However the Byelorussians observe different situation. Experts calculated that for last month prices for foodstuff grew by 12,2 percent.

- Businessmen suffer serious problems but I'll make no comments what part of them would stop work, - the chairman of the Minsk capital business league Alexander Kalinin declared. - I am now at one of such factories, we discuss process of its stop working.

- Today more than 90% of market participants suffer difficulties, - the chairman of the Minsk capital business league Karyagin told. - On Tuesday we will hold extra session of the league devoted to the situation where we will define forms of help to business and power and prepare recommendations.

- Who will be the first to stop if situation doesn't change?

- Those who imports into Belarus foodstuff, tea, coffee, consumer goods, accessories. Yesterday the work of enterprises delivering accessories for hydraulics and other accessories including for state enterprises was suspended. Publishing houses, packaging companies also have problems, paper rises in price in one and half - two times. Subscription to the Russian magazines has been stopped - today I failed to subscribe for "Expert", there is no longer Russian-speaking "Forbs", "RRB". For a week I am trying to buy a medicine (I am diabetic). The pharmaceutics experiences difficulties - part of medicines is absent in drugstores. It's impossible to buy adult diapers for patients who stay in bed. How would we get sugar substitute, fructose? There are almost one million diabetics in the country. Therefore drastic measures to stabialize situation are necessary.

Proceeding from recalculation at the approached to real Euro exchange rate, 10 of 24 banks working with means of physical persons in Belarus have indicators which are below established by specifications. Their capital has fallen to 7,87-21,98 million Euro. 15 financial establishments were compelled to cease work in the Belorussian market due to devaluation. It turns out after recalculation of authorized capitals of financial establishments not working with physical persons that these banks have 1,42-4,92 million Euro capital that is also below the norm.

If one-stage devaluation would take place, only 8 Belorussian banks can "be kept afloat" and fulfill requirements of the prudential standard referring sizes of own capital for financial establishments working with means of physical persons.

- Events in Belarus - pure déjà vu of the events which took place in Russia in the beginning of 90s when there was privatization of state property against deep impoverishment of the majority of people, - editor-in-chief of FORUM.msk Anatoly Baranov reminded. - Sharp devaluation of national currency plus washing away of "import" currency - maneuver which the power undertakes to lower artificially balance cost of objects of the national economy exposed set out for privatization this year. Plus it leads to cutting out of structures of private business capable to participate in privatization - state property should be shared "between own guys". Actually the nomenclature transforms power into property. Russia offers Belarus stabilization credit - but in exchange for 2,5 billion dollars it wants to receive Beltransgaz. Lukashenko and his nomenclature, having obtained the credit, obviously, will spend its basic part on privatization. I think, for 2-3 years basic part of state property will pass to private hands, "shock therapy" will end and citizens will be told that life becomes better, life becomes more cheerful - developed capitalism has come. After defeat of opposition, as in Moscow in the beginnings of 1994, there's no political force which could resist to robbery. Political terror - the most convenient form of carrying out of capitalist transformations.

Send by mail

Print