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Higher officials of the Department of Economic Research and Statistics of the National Bank of the Republic of Belarus met with journalists.

To summarise the opinions of many specialists, the economic situation has not been too good during the recent two years. As it is known, the Belarusian government has been pursuing the policy of administrative control over the rising prices and the currency exchange rates for a long time. It was a boon for the import-oriented branches of national economy, such as agriculture, construction and the energy complex. But it was not as good for exporters. The cost-effectiveness of exports fell from 30-40 per cent in 1993-1994 to 10-11 per cent today. So, taking into consideration both positive and negative effects of the policy, the national economy in general has suffered losses as a result of such experiments.

P.G.Lyutko, head of the Department of Monetary Research characterises the present state of our financial system: "In our opinion, the country has accumulated an inflation potential. It is not evident, it is hidden, but its indirect manifestations may be seen today in the correlation between market and non-market exchange rates, in the difference between production costs and the cost of goods sold, and in some other factors of our economy. The administrative regulation of prices alleviates the situation to some extent, but the prices would rise, minimally, by 30-40 per cent (which would be twice as much as the official annual inflation level of 36-39 per cent), should such limitations be lifted. The inflation potential in Belarus is caused by pumping empty money into circulation. It is very difficult for the executive structures to resist the temptation of easily solving all problems – the "cash-box" is too close at hand. But the result of such actions is another problem, at a higher and more complex level of macro-economy.

Actually, the scientists stressed (all heads of the Department have scientific degrees), such policy is the policy of solving the country’s problems at the cost of the enterprises and individuals that work well. According to some estimates, inflation devalued the money owned by firms and individuals by 700 milliard roubles in November. The country, where social unrest is still felt in connection with the devaluation of the citizens’ bank accounts in 1991-1994, faces the same problem again: in December the citizens’ bank accounts "grew more thin" by one trillion roubles.

But, as the bankers have repeatedly stressed, the situation in this country is not hopeless. All the goals of the national economy development, laid down in the Decree of the President, are quite attainable. But in order to successfully reach these goals it is necessary ... to reach them without deviations.

What they say is not a truism. The officials of the National Bank warn that there is a chance of a flop of the stabilisation program. They see danger in the approaches adopted by the authorities. Here are some figures for demonstration. As experts recommend, credit emission in the coming year should not exceed 3.7 milliard roubles in any case. This figure is the threshold of hyperinflation, which is destructive for the country’s economy. But even today the draft budget envisages 3.25 milliard roubles of credits. And still about 2,5 milliard roubles are necessary for the financial support of decrees on compensation, for housing construction and so forth. In addition, the economic programs will require no less money. Does it mean that we will have to make the burden on future generations even heavier? Shall we make the poor more poor?

Meanwhile there exist quite civilised methods of solving such problems, some of them have been tested in this country. For example, the growth of the budget deficit last year was to a considerable degree financed through state bonds release, which does not enhance inflation as much as granting direct credits. There are all precondition for following the same line this year. Besides, bonds issued by municipal councils are expected to appear on the market. Experts of the National Bank expressed their hope that the amounts of direct credits into the budget would be progressively reduced, since the 1997 Program of the Restoration of the National Economy envisages the restoration of natural inflation-reproductive processes in the sphere of finance. In order to achieve this aim, however, it is necessary that the National Bank, the President Administration, the Finance Ministry, and other financial bodies of the country work in one direction.

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