Trade balance slipped back to negative values
In October 2011 the negative trade balance reached $ 151.7 million, while during the previous 3 months the trade balance was positive. As a result, the trade balance could decrease to the level of 2010. It is the best illustration of the problems of the Belarusian economy and of the inability to improve its competitiveness artificially.
In January-October 2011 foreign trade deficit in goods and services was negative and amounted to USD 2075 million. In October it was negative and amounted to USD 151.7 million, and during the previous 3 months, it had a positive value.
Regardless of almost three-fold devaluation, there is a significant shortfall in Belarus, which needs to be financed either by external borrowing or by the sale of state property. The negative value of the foreign trade balance is mainly due to export-import operations with intermediate products (energy, raw materials and components). The balance of foreign trade in energy was negative, amounting to USD 3 471.2 million, against USD 4116 million in January-October 2010. However, by the end of the year the negative trade balance could reach the level of 2010 (including arrears for gas payments for the third quarter of 2011 of $ 200 million and increased gas prices, as well as slowdown of export growth). It is the best illustration of the problems of the Belarusian economy and of the inability to improve its competitiveness artificially, even though in the medium term. With the strengthening of the Belarusian ruble the effect of the devaluation and its positive impact on export will evaporate completely.
Therefore in 2012 the authorities will once again face the dilemma of: either to sell the gold reserves to support the exchange rate of Br or to devalue the national currency once more. Strong ruble coupled with a loose monetary policy and increasing salaries (the government is forced to raise salaries, as the recession and the subsequent labor migration to Russia becomes a real threat) will once again boost imports and decrease exports.
In the meanwhile, the new forecast of socio-economic development pan by the Government implies the GDP growth at 5% due to exports only. Bearing in mind all of the above, it is clear that the 5% GDP growth has been put there at the request of Alexander Lukashenko. The real economic situation will be much worse: the economy will accumulate old economic problems, which can only be solved by real economic liberalization and privatization.
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.